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HUMAN RESOURCE PLANNING
A Case Study Based Analysis of the Extent to Which Organisations Plan for Human Resources in the Contemporary Business Environment
Jonas Andersson, Henrik Avasalu & David Gabrielson
Graduate Business School School of Economics and Commercial Law Göteborg University ISSN 1403-851X Printed by Elanders Novum
“Every time I have prepared a battle, I’ve been forced to admit that the plan is useless... ...but planning is crucial” Dwight D. Eisenhower
. Although a complex subject. Key-words: Human Resource Management.Abstract Human Resource Planning (HRP) is a complex subject. eight case study companies from different industries have been used in order to identify if there are any industry-specific differences or trends regarding HRP aspects. The purpose of this study is to investigate the nature of. with the right skills in the right places at the right time. clearly influences the way in which they approach HRP. For this study. particularly at the time of increasingly turbulent business environments delivering far more discontinuities. One of the results from our investigation of the studied companies shows that the degree of stability in their respective industries. which increases the tensions between the greater need for planning and the greater difficulties of prediction. Human Resource Planning. and to what extent companies are able to manage this complexity. in terms of employee turnover and economic fluctuations. the underlying purpose is straightforward. Strategic Planning. Turbulent Business Environment. HRP is concerned with having the right people.
..........1 Research Strategy ...........................................................3 1................................................. 37 4....................................3 The Contemporary Purpose of HRP.................................................................7 SKF Sverige AB .............. 41 4.7 Different Types of Human Resource Planning ......................................... 52 4....1 Ericsson ..................................................................3 Objectives of the Study ............................................................................................ 33 4...................................................................4 Mölnlycke Health Care . 5 2..................................................................................... Theoretical Framework ............................................................. Methodology ..........6 Scandinavian Airlines System........................ 11 3...............5 Techniques for Managing Supply and Demand of Competence ... 22 3......................................... 1 1.............................................................................................................................. 29 4................5 Structure of Thesis.....................................................................................................................................2 The Evolution of HRP ........1 Research Background.............................. 18 3.......................... 10 3..........6 External and Internal Influences on HRP.....3 Data Collection..................5 2...1 1...................................................................... 25 3.......6 Research Model ...........2 Problem Focus ...................2 Handelsbanken .............8 2............. 46 4.......................................................................................7 2............4 Data Analysis...................................4 The Case for and Against HRP ....... 33 4......................................... 12 3......3 1.............. 49 4..............................8 AB Volvo...... 16 3..................................6 2.....4 2.........................2 Research Method ..................................................... 55 ......................5 2...................4 Delimitations ................................................................................................................................................................5 Research Credibility .................5 Sahlgrenska Universitetssjukhuset................................... 11 3.2 1................. 38 4............................................ Summary of Empirical Findings..................................TABLE OF CONTENTS 1........................................1 Human Resource Planning – Concept Clarification ................................................................................3 McDonald’s – Sweden ....................................................................... Introduction ..................................................................................................................................................
........5...............................4 Future Aspects of HRP ..............................3 Internal and External Influences on HRP...................................1 Web sites................ 63 5.................................................. 59 5............ List of References ....................................................... Analysis ........................................................................2 Annual reports ...................................................................................... 73 7............ Appendix ..................... 81 8....... Conclusions ........................................ 81 7.......... 67 6............2 Approaches to HRP ...... 83 .................. 60 5.........................................................................................................3 Interviews .....................................................................................................1 Reasons and Motives for HRP among the Case Study Companies ................................................................................................ 69 7... 59 5.... 81 7........................
In the light of this we want to investigate to what extent organisations plan for HR in today’s business environment. One possible explanation is presented by Storey (1995). However. and the prerequisites for fulfilling these motives. the rapid changes in the business environment also makes it increasingly difficult for organisations to plan with accuracy.Chapter 1 Introduction 1. there has been little research evidence of its increased use or of its success. HRP is usually seen as an essential feature of the ideal-type model of human resource management. 1. even if it does not always appear to be given high priority in practice (Rothwell. namely what the underlying motives for conducting HRP are. We have identified two main concerns in order to arrive at a conclusion. who argues that as the developing business environment forces organisations to plan effectively for their human resources. our delimitations and the structure of the thesis. We also discuss the objectives of the study. 1 . The issue of effective planning for people was brought up long before the advent of human resource management. At the same time. 1995). organisations are putting more and more emphasis on aligning the organisation and people in their attempt to achieve business goals.1 Research Background Organisations are under increasing pressure to find ways to implement their strategies in a rapidly changing business environment. Introduction In this chapter we present the background of the subject and give an overview of the research problem. in which planning lifecycles tend to shrink to reduce the ‘time-to-market’ intervals.
The two sub-problems of the study aim to provide a gap analysis considering the expected outcomes of HRP. 2 . thus providing an analytical platform on which the main problem can be investigated.2 Problem Focus With the research background in mind we have formulated the following main research problem: Main Problem To what extent do organisations plan for HR in contemporary business environments? This problem has been further divided into two research problems: Research Problem 1 What are the reasons and motives for conducting HRP among organisations today? The way in which organisations view HRP will have a great influence on the way it is carried out. the increasingly turbulent business environment has had a great impact on organisations ability to plan. and the possibility to plan for HR. Research Problem 2 How does the business environment in which the company operates affect HRP? According to theory.Chapter 1 Introduction 1.
We have limited our study to include long-term HRP.4 Delimitations To limit the scope of our research was of major concern for us in the beginning of our work in order to arrive at some kind of starting point. The aim specifically focuses on the increasingly turbulent business environment causing new prerequisites for companies’ ability to plan for HR. we aim at analysing the underlying reasons and motives among our companies of study in regards to HRP. Our definition of long-term corresponds with the definition we have found in literature. such as the daily work with questions regarding salaries etc. thus representing additional markets. Our study relies heavily on empirical data. it was not realistic to design our research to include visits to organisations outside of Sweden. due to the specified timeframe and economic factors. 1. However. We argue that when these new conditions for planning are put into contrast with the reasons and motives behind HRP. Furthermore.3 Objectives of the Study Our main objective with this study is to investigate to what extent organisations plan for HR.Chapter 1 Introduction 1. which refers to plans that extend over a period of two years into the future or more. This study is therefore not covering activities within the HR departments concerning shorter time aspects. most empirical data is collected from organisations with worldwide operations. 3 . an equilibrium between what is desired and what is feasible will ultimately decide to what extent HRP is possible in the specific organisation. on which we were able to build a realistic and feasible study.
5 Structure of Thesis Introduction Methodology Theoretical Framework Empirical Results Analysis Conclusions 4 .Chapter 1 Introduction 1.
we feel that using surveys will not reveal a clear and honest enough picture. 2. The section starts out by explaining what research strategy we have used.1 Research Strategy The strategies that are of interest to our study are surveys and a multiple case study. our intention with the design of the study is at the same time to use contrasting cases. The cases are also comparative in the sense that all the interviewees possess equivalent positions. Finally. organisations from different industries and of a different size. Our research includes cases from the following industries: aviation. as the respondents will be too much guided by our questions. restaurant. we discuss the credibility of our findings. one of the strengths of a case study is its unique ability to use a lot of different empirical evidence (Yin. However. Thereafter follows a description of the data collection and data analysis. small-scaled. followed by research method. hospital.Chapter 2 Methodology 2. Methodology The aim of this section is to give the reader an insight into how the research was done. 1994). engineering. 2. It is therefore not enough to study the case of a single organisation. The purpose of such a design is to arrive at a basis on which we are able to draw comparisons and/or contrasts between organisations operating in different industries with varying levels of turbulence in their surrounding business environments. Our main focus is to examine to what extent organisations plan for human resources. i. Moreover. The research strategy that is best suitable to our thesis is therefore a multiple-case study. banking.e. The manufacturing 5 . As one intention is to investigate each organisation’s reality by using the interviewees as tools of information. They are comparative in the sense that the interviews are semi-structured.2 Research Method We designed our study in such a way that the research findings will represent comparative cases. and manufacturing. thus inviting the interviewees to enlighten additional areas of importance. and entrepreneurial. Case studies are suitable for practical problems and they are often thought of as being problem-centred. telecom.
Aware of some of the pitfalls of conducting interviews in this manner. Our research method is clearly qualitative. Moreover. such as response bias and reflexivity (Yin.. we had neither predetermined the 6 . a mix of more or less structured questions where the interview is guided by a set of questions and issues to be explored. 2. which in turn provided us with a sound platform for each case that we built our interviews upon. which we feel is necessary in our attempt to find answers to our research problems.e. The kind of interviews that we used is what Merriam (1998) refers to as semi-structured interviews. i. annual reports. A qualitative approach enables us to gain an extensive understanding of each case that we have studied. as we conduct in-depth interviews from a relatively small sample of organisations.3 Data Collection Our data collection involves several different strategies such as conducting interviews and identifying comparable theories through various books and journals. 1994). annual reports from the various cases are reviewed in order to have a more detailed understanding of the case study companies.1 Interviews Conducting interviews represents one of the essential sources of gathering information for a case study. 1998). By collecting primary data we ensure our information to be relevant from a time and real-life perspective.3. The secondary data provides us with a deeper understanding of the subject as well as the subject’s history and development. 2. By gathering internal secondary data.e. which is true in our case study as well. There is no single source of information that can provide a comprehensive and complete perspective on the study (Merriam. i. we learned how each organisation was structured etc. one operating within transport and the other producing single use surgical products. It is therefore important for case study research to use multiple sources of data to get as broad a view as possible about each specific case.Chapter 2 Methodology industry is represented by two organisations.
We had a set of topics to be explored common for each interview in order to be able to cross-analyse the answers. Carl-Gustaf. Björn. regarding how their organisation works with long term HRP. however we feel that these three interviewees possess the adequate knowledge legitimate to our study. we aimed at interviewing people who possess the most factual data possible and people who have a good insight into the subject of interest. we structure our analysis according to the steps presented by Merriam (1998). Tove. Our intention with the interviews was to explore factual data. both in the present and historically. Head of Human Resources Services – SAS Pollnow. This will further be discussed in section 2.4 Data Analysis In our attempt to collect and organise data in such a way that we later will be able to conduct an analysis.Ericsson Ling. As we are unable to explore reality within each organisation ourselves. Vice President Human Resources – Mölnlycke Health Care 2.5. The first step is to organise the data in topical or chronological order so it can be presented in a descriptive manner. Vice President Human Resources Sweden . Manager Human Resources – McDonald’s Sweden Krohn. Unfortunately. Claes.Chapter 2 Methodology exact questions nor the order of the questions. Human Resources – Sahlgrenska Universitetssjukhuset Forslund. Mikael. observed by the people interviewed. the interviews were designed so that the respondents were free to bring up other issues they felt were of interest to the subject. Region West – Handelsbanken Leinar. Kjell. Vice President Human Resources – AB Volvo Sällström. Vice President. Human Resource Manager. The next 7 . Bo. However. this could not be realised in three of the cases. This created a “discussion-friendly” atmosphere in which we were able to ask follow-up questions. The following persons have been interviewed: Andersson. The goal was therefore to interview the Vice President of the HR function in each case company. Magnus. Deputy Managing Director – SKF Svensson.
our aim was to enlighten factors that are general across the eight cases. However. As we are not intending to map HRP within the different industries but rather to examine different industries’ prerequisites and their affect on HRP. we argue that one case company from 8 . This truly enhanced our ability to cross-analyse the eight cases. which was that they operate in different industries. In the final step. which we also based on the questions found in the interviews conducted. since the comparable data were organised and classified in advance. All empirical data was organised in topical order according to the design of the interviews and presented case by case.5 Research Credibility Our eight case study companies were selected based upon one criterion. In the analysis we classify our findings into five categories: All of = 8 companies A majority of = 5 – 7 companies Half of = 4 companies A few = 2 – 3 companies One of = 1 company Also. developing models. or types. The classification of the empirical findings constituted the next step. themes. or generating a theory. Western Region = HWR McDonald’s Sweden = MCD Mölnlycke Health Care = MHC Sahlgrenska Universitetssjukhuset = SU Scandinavian Airlines System = SAS SKF = SKF AB Volvo = ABV 2. in the analysis the following abbreviations will be used for our case companies: Ericsson = LME Handelsbanken. individual findings that we felt were of interest and of importance to our study were stressed as well. The final step involves making conclusions.Chapter 2 Methodology step is to classify the data into categories.
In the other six cases. Rather early in the interviewing process. Also. At Handelsbanken we interviewed the HR manager for the western region. we have interviewed the person with the main responsibility for the HR function in each case study company. We therefore complemented the answers with information from strategic company publications regarding HRP. most appropriate for answering our questions regarding HRP. as the focus is put on industry prerequisites we have not emphasised the issue of finding representative companies for their respective industries. 9 . no matter how subjective it may be. The best potential interviewees therefore narrow down to only one person in each organisation. We considered them to be the only persons with enough in-depth knowledge and hence. However. As in the case of Sahlgrenska Universitetssjukhuset where the interviewee holds a middle management position. we learned that the higher the position possessed by the interviewee the better the ability to answer our questions. all of our questions could not be sufficiently answered. We considered the option to interview more than one person in each company to get a wider perspective on the matter.Chapter 2 Methodology each industry is adequate for our study. Handelsbanken is a decentralised company and every region is operated with great autonomy. have the main influence on the ways in which their organisation conducts HRP. namely the person responsible for the HR function. which is one of the seven regions in the Nordic area. The time aspect of our study forced us to delimit ourselves in the research. as each company is affected by its industry’s prerequisites no matter how they differ compared to its competitors. Not only did we have to consider the time aspect of the study but also the difficulties for potential interviewees to find time for us. Our aim with the interviews was to interview persons whose opinion. it was soon realised that it was of no augmenting value for our study since there are so few people within the organisation with overall knowledge to sufficiently answer our questions.
Chapter 2 Methodology 2. Western Region McDonald’s. Sweden Mölnlycke Health Care Sahlgrenska Universitetssjukhuset SAS SKF AB Volvo ANALYSIS CONCLUSIONS 10 .6 Research Model PROBLEM FORMULATION Ericsson THEORETICAL DATA EMPIRICAL DATA GATHERING OF GATHERING OF Handelsbanken.
the main distinction is between those who see the term ‘human resource planning’ as having broadly the same meaning as the longer established terms ‘workforce planning’ and ‘manpower planning. there is a big distinction between the two terms. while ‘human resource planning’ has a far wider meaning. leading to something of a mismatch between the concepts and the labels used to describe them. Without a profound understanding of the concept.’ and those who believe ‘human resource planning’ to represent something rather different. The first three sections deal with defining the concept HRP. He argues that ‘manpower planning’ is essentially quantitative in nature and is concerned with forecasting the demand and supply of labour.Chapter 3 Theoretical Framework 3. we would be at the risk of losing our problem focus. Since HRP is a relatively vast and complex concept. Here. According to Bramham (1994). The opposite opinion is that. 3. These sections are the foundation necessary for examining HRP in depth.1 Human Resource Planning – Concept Clarification As in so many areas of personnel management. According to Taylor (1998). as well as explaining its origins. the term ‘human resource planning’ is simply a more modern and gender-neutral term with essentially the same 11 . Theoretical Framework This chapter constitutes the theoretical framework on which we have focused our research. employee attitudes and organisational culture (Ibid). there is some confusion about the precise meanings of the terms used to describe the human resource planning function. developments in terminology have moved on at different speeds and in different directions than developments in the activities themselves. as elsewhere. including plans made across the whole range of personnel and development activity. In this section we want to clarify what we mean by the concept HRP. the purpose of the remaining sections is to break the concept down in order to get a more detailed insight of the different parts that constitute HRP. These activities include soft issues such as motivation.
short term planning. work simplification. human resource planning is a relatively specialised sub-discipline within the general activity undertaken by personnel managers. In order to be able to determine if the changes in the business environments regarding turbulence have had any impact on HRP. There are different views of the specific meaning of HRP. Planning for the staffing of work to be done is not something that has become popular in recent years. The relatively sophisticated techniques available to management today are outcomes of a long period of evolution in practices. organisation of management into levels. which started decades ago with simple. 1998). this section will describe the evolution and development of HRP. The techniques used by management tended to fit contemporary conditions and events (Storey. Thus. we agree with Bramhams’s view that HRP has a wider meaning. in the right places at the right time’ (Ibid). This is something that has grown to become what it is today. human resource planning has been a management function (Walker. as we believe that issues such as employee retention. it is essential to examine the evolution of HRP. pragmatic. Since the origins of the modern industrial organisation. with the right skills.2 The Evolution of HRP To get a better understanding of what human resource planning is and how it has emerged. According to this definition. We argue that it is more than a quantitative approach.’ Both are concerned with looking ahead and using systematic techniques to assess the extent to which an organisation will be able to meet its requirements for labour in the future (Taylor. specialisation. encompassing “soft” HR issues and it is the one that is accepted for the purpose of this text. 1995). 3. 12 . in the right places at the right time. attitudes and motivation are essential features for having the right people. They are thus undertaken in order to assess whether an organisation is likely to have ‘the right people. with the right skills. 1980).Chapter 3 Theoretical Framework meaning as ‘manpower planning. Division of labour. and application of standards for selecting employees and measuring their performance were all principles applied early in industrial management (Ibid).
Wikstrom. 1952). During the Second World War and the post war years. New technologies and interests in behavioural aspects of work also added complexities to the manpower planning task. 1971). court decisions and governmental regulations. 1968. In the 1960’s the demand for high talent personnel increased due to high technology programmes. Geisler. 1965. and identify the gaps between what will be needed and what will be available. as there was a talent shortage in combination with significant demand for goods and services. 1969. the focus intensified on employee productivity. manpower planning was viewed as a system linking the organisation with its environment (Patten. the focus in manpower planning was upon the hourly production worker. Walker (1980) argues that the most common view of manpower planning at that time. 1972. for example. rapid corporate expansion and diversification. There was also greater concern regarding the availability of competent managerial personnel. 1967). professional and technical personnel. Henemann et al. which also dominated the literature until the 80s. The 70s came with new legislation. Merril. While many companies adopted the techniques that had been introduced by leading companies during the previous 13 . manpower planning practices were focused on balancing supply with demand. Yoder. According to textbooks written during the later part of the 1960’s.” Further. selecting and placing new employees. 1959. The aim of improving efficiency through work engineering and early industrial psychology applications was consistent with the need to improve productivity and introduce greater objectivity to personnel practices (Ling. Vetter. particularly demand for managerial. 1967. was that “companies forecast their needs for manpower into the future. manpower planners develop plans for recruiting. Management attention then turned to affirmative action planning and other aspects of compliance. In order to handle this increase.Chapter 3 Theoretical Framework th During the first part of the 20 century. provide for training and development and anticipate necessary promotions and transfers (Buráck et al. forecast their internal labour supply for meeting these needs.
However. as it was increasingly becoming an essential function across the organisation (Zeffane and Mayo. Human resource planning shifted focus from being a quantitative approach. however. during which managers had to deal with the energy crisis. 1994).Chapter 3 Theoretical Framework decades. to a more comprehensive view of the process encompassing both needs forecasting and program forecasting (Ibid). 1994). activity analysis. safety and pensions. it was anticipated that the HRP function was to become the focal activity. human resource management researchers and professionals tended to place greater emphasis on employee attitudes and on the development of personnel strategies to search for the enhancement of positive employee feelings and commitment (Zeffane and Mayo. Zeffane and Mayo (1994) further state that HRP during the early 90s fundamentally consisted of a range of tasks designed to ensure that the appropriate number of 14 . 1994). Generally. it was an unsettled decade. the function underlined the importance and crucial role of dealing with the necessary changes in volume and make-up of the workforce. 1980). However. the slowing of business expansion and the increased concern regarding women’s liberation and reverse discrimination (Bramham. these strategies lacked sufficient concentration on the need to control the flow of personnel within and across organisational boundaries (Walker. The majority of companies. other experimented with new tools such as career planning. were mainly concerned about the compliance with the significant new regulations governing discrimination. As such. and reshaping of work (Walker. During the 80s and early 90s. it was during this time or decade that “manpower planning” was broadly being termed “human resource” planning and became widely established as a staff activity in major business and governmental organisations (Ibid). uncertain costs and profits. this meant that human resource planning took a backward step in priority placing within the overall human resource management system. due to the increasingly uncertain socio-economic climate during the 90s. According to Richards-Carpenter (1989). The term “human resource planning” implied a scope broader than just supply-demand balancing or quantitative forecasting. although recognising its importance. Generally. 1989). according to Bramham.
it is rather the individuals’ responsibility to make sure that they develop their competencies in order to attract future employment relationships. 15 . will be guidance consulting and employee brooking. they say that individual organisations will not necessarily be responsible for the individuals’ competence development. In a labour market that is increasingly characterised by time limit employment rather than life long contracts. HRP was seen as a way to plan for the future demand for people. however. There will be a need for people who work with professional career service to assist the individuals with their career planning if the individual will be responsible for their own careers. through and out of the organisation. much of the “strategic personnel work” will not be as important since individuals will be responsible for their own competence development (Damm and Tengblad. This could mean that it will still be necessary with employees working with personnel-related questions. Furthermore. The employee brokers can assist in the process of identifying the different potentials and overlapping between demands since they have a better overview than the individuals have. for individually focused personnel work. the role of the HR personnel is to provide and develop an attractive organisational environment in which the individual feels inspired to grow and develop his/her competence. designed to manage the flow of people into. Damm and Tengbland (2000) argue that in the future. there will be a constant requirement to link competence demand with competence supply. 2000).Chapter 3 Theoretical Framework the right people are in the right place in the right time. The ultimate situation is when the individual feels that the organisation provides the best resources available in order for them to grow and develop their competencies. which was carried out by certain dynamic processes. Damm and Tengblad also argue that two very important future working areas.
Mullins (1996) argues that effective HRP can help anticipate potential future difficulties while there is still a choice of action. 16 . This section will present the contemporary purposes behind HRP as argued by theory. thus increasing the tensions between the greater need for planning and the greater difficulties of prediction. the more significant accurate HRP is to the organisation’s effective operation (Bramham. and accommodation requirements. management development and career progression. HRP provides the information on which recruiters base their activities and it reveals what gaps there are between the demand for and supply of people with particular skills (Bramham. 1987. 1987). Storey. early retirements. transfers and redeployment. The second objective aims to reveal what training and development activities need to be undertaken to ensure that existing employees and new recruits possess the required skills at the right time. salary levels. Mullins.Chapter 3 Theoretical Framework 3. It seems relevant to investigate what the organisational purposes underlying the planning of human resources are and also what the expected outcomes are from such planning. Forward planning should enable the organisation to develop effective personnel strategies related to such activities as recruitment and selection. anticipated redundancies. forward-looking insight into not just the number of employees. skills. Bramham (1987) presents a more detailed view of six basic objectives. and attributes of the people that will be needed in the future. The longer and more specialised the training is. especially in times of rapid changes in the business environment. 1995. but also the type. 1996). The first objective and a major purpose behind the use of HRP is to give an organisation a broad. HRP can be a complex subject. training and retraining. which are quite similar to those mentioned by Mullins (1996) that are thought to constitute the purpose of HRP.3 The Contemporary Purpose of HRP In contemporary contexts.
and other workplace facilities.Chapter 3 Theoretical Framework Manpower costing is listed as the third objective and explains how HRP assists in cost reduction by aiming to work out in advance how organisational operations can be staffed most efficiently. It is particularly significant when long-term deals are being negotiated to improve productivity and efficiency. is collective bargaining. 1987). In organisations with a strong trade union presence. In such situations. presented as the fifth objective. Another advantage associated with HRP. HRP also here aims at controlling costs over the long term by forecasting the future (Bramham. 1987). and early retirements so as to reduce the numbers involved. especially to organisations expecting fast expansion or contraction of key operations. The sixth and last objective presented as a purpose of HRP deals with the planning of accommodations. HRP provides important information for use in the bargaining process. The fourth objective presented by Bramham (1987) is redundancy. As with the other five objectives described above. 17 . the information provided by HR forecasts enables calculations to be made concerning how great an increase in pay or how great a reduction in hours might be conceded in exchange for more productive working methods and processes (Bramham. such as recruitment freezes. 1987). This is of even more importance when new ventures or projects are considered because it provides information on which to base vital decisions (Bramham. Such considerations are of great importance. such as future need for office space. car parking. HRP is an important tool in the anticipation of future redundancies and therefore allows remedial action to be taken. retraining.
According to Allaire and Firsirotu (1989). We find it crucial to examine both cases in order to have a balanced view in our attempt to analyse our findings in regards to the problem focus.4 The Case for and against HRP This section starts out with presenting the theoretical arguments against HRP. 1992. 1995). Untermann. the nature of the planning in an uncertain environment and the difficulty of implementing plans. Torrington and Hall. argues that the human resource is far more complex to plan for than financial resources. and the importance of treating people as people and not an inanimate resource. 2000) has advanced this view saying. He comments on the critical differences between people. 2000. 1974). Hussey (1982). Rothwell.1 The Case against HRP Concerns raised about the feasibility of human resource plans focus on the nature of the human resource. While most literature emphasis the essence of short and long term HRP (Bell. Short of being able to control the environment. 1989. Minzberg says (1994) that almost everything written about planning stresses the importance of accurate forecasting. These arguments are all based on the simple proposition that it is impossible to forecast the demand for and the supply of labour with any accuracy. is to predict what kind of change will come. planning depends on an ability to predict where that environment will be during the execution of the plans. 1994. of course. 18 . predict the changes in itselves. These concerns are not unique for only HRP but are problems found across all types of planning.Chapter 3 Theoretical Framework 3. Part of the problem. let alone. uncertainty is the real weakness of strategic planning. Walker. 3. the costs of over-staffing. Mintzberg (1976. This case against the long term planning of human resources seems to have more and more resonance as the business environment becomes increasingly turbulent. 1996.4. followed by the case for HRP. some authors have developed different arguments (Mintzberg. in a book about corporate planning. the difficulty of moving them around. Smith.
Competitive advantage today.’ Finally. according to critics of strategic planning. in all likelihood. as the world is increasingly complex and unpredictable it is not worth trying to predict what will happen more than a year ahead. have to be revised several times in the light of changing environmental developments (Taylor. 2000). Unterman (1974) after reviewing the popular “Stanford method” of strategic planning concluded from his own consulting experience that “he has yet to see any drastic or major corporate revisions resulting from it. all forecasts are inevitably based on questionable assumptions.” Thus.” Secondly. having once prepared a plan. but there is also a whole set of problems associated with assessing its likely impact on the organisation over time. As a result. 1996). as a result. making the “executive feel too secure and thus inattentive to changes. and so a resistance to significant change.Chapter 3 Theoretical Framework in practice. 19 . “a tendency. Any plans that are made will. the planning process tends to impede the achievement of competitive advantage. Furthermore. Not only is the discontinuity difficult to predict itself. more innovative and more flexible than those of key competitors – qualities that are stifled by the bureaucratic characteristics of planning processes (Smith. to ‘make it work. This could in turn mean that the preparations undertaken to meet inaccurate predications might well cause greater harm to the long-term interests of the organisation than it would have if the organisation had taken a less definite view of unfolding developments (Mintzberg. “psychological resistance” due to the establishment of “mind-set” and fear of “loss of face” if plans are changed. Newman (1951) attributed the inflexibility of planning to several psychological factors. Mitzberg (2000) argues that planning itself breeds basic inflexibility in organisations. it is claimed that. most forecasts turn out to be wrong and that. more creative. comes from generating responses to fast-changing circumstances that are swifter. The underlying argument is that the new and more turbulent business environment delivers far more discontinuities than the business environment did during the 70s and 80s. 1998). Firstly. except in situations where the organisation itself is able to exercise control over future developments.
1955. Instead. and the more realistic the organisation’s problem solving processes are the more future scenarios they can accurately plan for (Vickers. Wickesberg. This means that Mintzberg’s arguments could prove to be more valid from a general management perspective and may have less relevance to HRP. which help to avoid problems. Because every organisation fails to predict some events. As a result. Taylor stresses the point that Mintzberg’s arguments concern business planning in general and are not related to only the management of people. the use of HRP can assist organisations to foresee changes and identify trends in staffing resources.2 The Case for HRP Theoretical Framework According to Taylor (1998) HRP involves considerable uncertainty. (1976). 1961). there is an even greater need for organisations to develop the capacity to plan accurately. According to many authors (McNulty. an organisation should plan its future but not rely on its plans. in which plans are continually updated in the light of environmental developments. an organisation needs to have balanced criteria for developing plans and goals. 1962. Starbuck. 1959). However. 1965.Chapter 3 3. Newman and Logan. due to the threat from potential discontinuities. The point is that HRP has never been intended to produce blue-prints that determine the direction that recruitment and development policy should take years to advance (1998). Moreover. when unforeseen developments do occur. Plans and long-run goals allow an organisation to anticipate what will be required tomorrow. according to Hedberg et al. plans and goals are frequently too systematic and 20 . it is not a science. it is viewed as a less deterministic activity. Taylor (1998) continuous to say that because the business environment is becoming increasingly turbulent and unpredictable. However. Tayor (1998) argues that in practice changes in the environment rarely occur as suddenly as Mintzberg (1994) suggests.4. there is time for plans to be adapted and updated to enable the implications to be met. and mistakes are bound to occur. and to adopt personnel policies. However. extremely detailed plans or plans that are extending very far into the future waste problem-solving capacities and also discourages responsiveness.
Manzini (1984) claims that in spite of the difficulty of developing a plan. 1975). 1972.Chapter 3 Theoretical Framework rational. which increase the likelihood of the environment being controlled to a reasonable extent. According to Taylor. the balance between visioning and planning will be different depending on the environment. 1962). erratic and uncertain (Moore and Tumin. it is 21 . A realistic organisation keeps itself ready to replace its plans and goals in order to match and exploit environmental unpredictability (Beer. will generally get us closer to the target than if we had not planned. a manager will quickly lose his way in this rapidly changing environment. Plans need to be viewed as flexible and reviewed regularly. imperfect though it may be. Starbuck. In a highly uncertain environment the emphasis needs to be put on the visioning process. 1949. as knowledge of the future environment becomes clearer. but rather something that has to be continuously monitored. useful goals are somewhat unclear. and where things are slightly less chaotic. rather than seen as an end point in the process. Bramham (1988) argues that the modern manager must develop the systems and controls. organisations should plan for a number of possible outcomes. which can later be updated. In effect. Without an accurate awareness of his position. refined and updated. what is being argued for is that it is both possible and desirable to plan for uncertainty. Schneider. simpler data analysis and an emphasis on action planning and implementation. supporters to HRP suggest that in order to maximise the organisations’ profits in times of great uncertainty. with a clear focus on human resource issues. According to Torrington and Hall (1995). 1965. Walker (1992) argues that human resource plans are becoming more flexible and short-term. and useful plans are somewhat disorganised. HR planners need to ensure that they have committed people with the right skills to exploit whatever opportunities arise. planning has a greater contribution to make. The aim of this would not be to follow a plan rigorously but to create a flexible plan covering different possibilities. They further argue that plans should not be seen as isolated events. 1974. Taylor (1998) argues that to achieve maximum potential competitive advantage. Further.
the other major feature or output of the HR management model is the emphasis on commitment to the goals of the organisation. discipline and performance may also be available. 1998). and for which HRP may be important (Rothwell 1995). Either to get a feel for the likely trends and changing patterns of skill availability for the established company. or to serve as a more precise guide for a start-up firm or one seeking a new location.Chapter 3 Theoretical Framework therefore the uncertainty that provides the rationale for increased attention to thinking ahead. skill and experience. and as the result of other 22 . It can also be of assistance when recruiting a particular type of employee where more detailed information is needed. job history. pay and conditions. HRP is principally concerned with assessing an organisation’s position in relation to its labour markets and forecasting its likely situation in years to come. but can be more accurately assessed through appropriate recruitment techniques (Taylor. in terms of age. etc. According to Taylor (1998). are more straightforward than those of attitude. Moreover. An ideal type feature of HR management is the assumption of a developmental approach to employees. Estimates of supply usually start from a scan of the external environment. which may be more important in human resource terms.5 Techniques for Managing Supply and Demand of Competence As HRP to a great extent is concerned with the planning of competence. sex. Taylor (1998) further argues that details of education. Some awareness of the techniques available is important for appropriate policy choices to be made. 3. race. where relevant. Information on this may derive largely from stereotyped hearsay. though not always easy to acquire. in which techniques of reward and career development may play a significant part. in relation to business needs. Information on attendance. this section will examine some aspects on the supply and demand issue of competence that are brought up in theory. qualifications. which appears to imply some form of systematic management of the assessment and augmentation of their ability. Rothwell (1995) argues that data on the internal supply of labour are much more readily available.
First. or ten years. external population trends. The other major variable is the nature of the activities carried out by the organisation. Turbulence in the product or market environment may be the norm now. is frequently the more difficult aspect. Although this represents the simplest planning technique and can help to indicate likely forthcoming shortages. although apparently easier. such projections are neglected surprisingly often (Rothwell 1995).Chapter 3 Theoretical Framework forms of assessment. 1998). it is possible to look forward one or two years and make reasonable assumptions about what staffing requirements will be. Estimation of internal labour demand. even for public sector organisations. Increased levels of absenteeism may be a sign of impending dissatisfaction and intention to leave. It gets far harder when time-scales of three. The unknown aspect of internal supply is the weakness of all human asset accounting. 1998). to see if they match a normal distribution curve. and people in low-level rather than responsible jobs. Organisations in relatively stable environments are able to 23 . five years. as well as in many smaller businesses where once apparently stable markets were found (Taylor. From these data. but may also demonstrate patterns of workplace culture or managerial control systems (Edwards and Whitson 1989). in view of many uncertainties of recession and the rapid changes that are taking place. such as that young people are more likely to leave than older. The ability of HR managers to predict accurately how many people will be required and with what skills depends on a number of factors. cost savings. or any other preferred pattern. Certain patterns are generally known. This is because relevant technological or economic developments that will have a profound effect on the level and kind of activity carried out by the organisation may not yet even have been contemplated (Taylor. predictions can be made of likely staffing levels and of retirement patterns by projecting forward current age profiles by three years. there is the time-scale that the forecast is intended to cover. five or ten years are contemplated. which are increasingly subject to privatisation and market testing. or succession problems. Except in the most turbulent of environments. the fact that people choose to leave.
1995). Here. 1995). presented by Rothwell (1995). Such an approach is straightforward and thus only suitable in relatively stable business environments. A number of distinct approaches are identified in the literature.Chapter 3 Theoretical Framework forecast their needs with far greater confidence than organisations operating in inherently unstable conditions (Taylor. Clearly. including time series analysis. most mathematical and statistical techniques used in demand forecasting are concerned with estimating future requirements from an analysis of past and current experience. A rather different approach to forecasting demand. work study and productivity trends. The work study approach has a different basis. is to base forecasts on the subjective views of managers about likely future human resource needs. instead of assuming that the ratio of business to staff will remain broadly constant. 24 . Storey (1995) argues that there are different approaches to forecasting demand. in situations where the business environment is highly volatile and where future staffing patterns may well bear little resemblance to past experience there is no alternative to using informed opinion as a basis for estimates (Rothwell. Time series or ratio-trend analyses look at past business patterns and the numbers of people employed in different roles to make judgements about how many will be required to meet business targets in the future. special studies are undertaken of individual tasks or processes carried out by the organisation in order to establish the numbers required to complete them most effectively and efficiently. 1998). The method is thus suitable in situations where there are no clear trends in the past to examine (Rothwell.
filled with global competition and business discontinuities. Evidence so far suggests that 25 . 3. The stability of the smooth sailing years. all have some impact on the labour markets of even the smallest firm trading in national market (Taylor. It is therefore of interest to investigate more specifically what not only the external factors are but also the internal factors influencing HRP. therefore. the increasingly turbulent and more fast-changing business environment is affecting the ways in which today’s organisations conduct HRP. likely to be trading internationally (Rothwell 1995) in some way and will need to understand the labour markets in those countries. which the HRM function can make to the organisation (Institute of Personnel Management 1992). if they are to recruit staff abroad or if they expect to send their own staff to work there. The need for analysis of changing scenarios.1 External Influences on HRP A lot of things have changed from when HRP first gained widespread popularity. define the arena in which HRP must flourish. however. as Champy (1995) refers to the age of US corporate domination between 1948 and 1973 is gone. If this review has not already been carried out in some depth as part of the formulation of corporate strategy. Most larger and medium-sized companies are. The growing internationalisation of business in the face of changing patterns of world trade.6.6 External and Internal Influences on HRP As argued in the theory presented earlier. The first step in HRP is usually the “environmental” scan. The whole issue of international management development has major implications for strategic planning and for human resource forecasting and implementation.Chapter 3 Theoretical Framework 3. has to be an integral part of the HRP process (Rothwell 1995). 1998). Today’s dynamic environment. the emergence of new competitors and new markets and changes in the older industrialised countries. consideration of critical trends may be a major contribution.
trade union and employee rights. International and political issues are clearly closely linked.Chapter 3 Theoretical Framework there are many inadequacies in both planning and implementation of management mobility. and national population statistics are readily available. At a time of economic recession in particular. Public policy emphasis on training. are just a few examples of events with implications for business planning. the move towards greater European unity. a lack of advance planning tends to increase labour costs. and by which they have been conditioned (Lucio and Simpson 1992). the opening of Eastern Europe. Also. the co-ordination of a plethora of national vocational qualifications. External political factors. the costs of worker protection policies can be very costly for companies. as well as the level of support for private or public sector enterprises. for example in physical environmental awareness and the implications for products or processes and energy use. and that there is a widespread reliance on ad hoc use of expatriate managers (Ibid. the unification of East and West Germany. The World Trade Centre bombings etc. Demand-side factors stem mainly from business strategy. but interpreting likely trends in supply and demand is complex (Pike et al. Data on graduate qualifications are readily available. The political complexion of a government tends to affect the type of economic policy in place. and the setting of national education training targets all mean that some aspects of estimating external competence supply will be improved. provide a socio-political context in which managerial strategies have had to develop. Rothwell (1995) argues that an awareness of population trends is critical in understanding labour markets. but need to take account of other skills that may be needed. the attitude to full employment. especially the broader social and regulatory legacies of industrial relations. If mergers or acquisitions are expected. 1992). or in marketing. in concepts of relational marketing. as firms have to increase wages and salaries in order to retain staff or poach them from other firms. 1995). customer education and general supply chain management.. Rothwell further states that planning to take account of demographic trends is not often done early enough. is new expertise needed to handle that? Or if organisation structures 26 .
Chapter 3 Theoretical Framework are changing to create flatter organisations or new internationalised business market divisions, are there skills available in managing networks, managing projects or managing cross-culturally? Firms that use competence-mapping techniques may be able to provide data relevant to HRP, but where these activities are done by different people and/or at different locations, such linkage cannot be made (Rothwell, 1995). The implications of new technology have been the object of intensive academic and policy debates for the last twenty years. The speed of recent change has been such that the applications of computerised technology in products and processes are now driving and facilitating much of the market, as far as the organisational and communication changes that are taking place. The scope for substitution of labour by capital, and the need for more creative and more relational uses of human skills, particularly those involving interpersonal relationships and the ability to relate ideas laterally, is growing considerably in many countries, industries and companies. The implications for numbers, skills, location and design of jobs and employment contracts are therefore more significant than is currently realised by many HR managers. Those managers are often too busy coping with the cost-cutting redundancies arising from what appear to be largely cyclical economic effects, but which may also be caused by real structural changes now taking place in employment (Rothwell 1995). Consumer attitudes tend to be surveyed more regularly than those of employees, but shifts in employee preferences are perceptible, often on a generation basis. The generation of people born in the 70s and 80s are more individualistic, less likely to accept authority, expecting to have a say and be given a choice, and also to be putting more emphasis on quality of leisure and family life. The priority perks for those in work are those related to health and to education and training. Employees are also less likely to remain with one employer. These attitudes are found particularly among “knowledge-workers”, and may be modified over-time by experience of recession and widespread white-collar unemployment (Rothwell, 1995). If a major difference between HRP and manpower planning lies in its emphasis on motivating people (Bramham 1989), understanding the starting point and changing the direction of employee attitudes could become more important.
Chapter 3 Theoretical Framework The incorporation of both individual and organisational needs is therefore the major challenge for HR planners and should be reflected in the application of the planning process to the ways in which people are employed (Ferner and Colling 1991). 3.6.2 Internal Influences on HRP Zeffane and Mayo (1994) argue that in the context of the supply-demand equation, a range of internal factors require consideration for the purpose of evaluating existing (or anticipated) supply from within the organisation. The supply side issues that HRP should address include the organisation’s policy on growth from within or by means of outside recruitment; the policy on pay and remuneration, and the organisation’s view on employee development. In this context, the conventional human resource plans take into consideration a series of supply side statistics, such as company growth, the age distribution of employees, skill levels, turnover ratios and the overall profile/distribution of employment across job categories. Zeffane and Mayo (1994) further state that among all these, age and retirement are emerging as important considerations in workforce planning in the current socio-economic climate. These factors (i.e. age and retirement) are strongly related in the sense that retirement takes place on the attainment of a certain age. Catering for age is necessary and is becoming increasingly the subject of a more elaborate mathematical modelling for workforce (Mohapatra et al. 1990). Additionally, HRP has to take into consideration the total corporate plan, which would incorporate, set out or anticipated productivity standards (Wilson, 1987). The more contemporary approaches to HRP need to consider current (and anticipated/future) changes in the make-up and aspirations of the workforce. Long-term macro-level forecasts seem to suggest that people in the future will have even greater desire for self-development and discovery (Taylor, 1998). These aspirations may trigger requirements for changes in existing corporate structures and management systems. As a result, human resource professionals and their organisations may capitalise on the advantage of potential employees who may be creative and self-motivated, but they will also face the problem of developing an environment that will attract and hold such individuals (Taylor, 1998).
3.7 Different Types of Human Resource Planning
In the light of different aspects concerning supply and demand of competence as well as different factors influencing HRP, this section will present various methods for carrying out HRP. The aim of this section, combined with relevant findings, is to provide a sound foundation on which we can base the answer to the second research problem. In other words, is the choice of HRP method influenced by business cycles? Also, are the methods presented in theory relevant to organisations as of today? 3.7.1 Succession Planning One adaptation of traditional HRP that takes place mostly in larger organisations is the development of a succession planning function. Storey (1995) argues that chief executives often see this function as the major rational for any form of HRP. While in some organisations it may be focused mainly on the few top positions, the need to consider at least a five-year-period can mean that it becomes a more significant operation, and eventually drives a whole management recruitment and development programme. According to Taylor (1998), succession planners are mainly interested in ensuring that their employer has enough individuals with the right abilities, skills and experience to promote into key senior jobs, as they become vacant. According to Jackson and Schuler (1990), succession planning differs from traditional HRP in the sense that the succession planning process covers a narrower group of employees but does so with a higher degree of intensity. As succession plans concern relatively few employees, they can be considerably more sophisticated. The time span is also longer than that of traditional HRP. Succession plans often involve forecasting and planning the progress of individuals 20 years ahead or more (Walker, 1992, Storey, 1995). Storey (1995) argues that succession planning is most often associated with hierarchical organisations in which individuals develop careers by moving upwards and sideways over a number of years as they acquire the required skills and experience. The aim of this is to ensure that enough individuals with the potential to succeed to senior positions are available when an appointment
Chapter 3 Theoretical Framework needs to be made. Rothwell (1994) states that three candidates are typically identified for each senior post: one who is ready now and could succeed immediately if necessary; one who will be ready, if needed, in two or three years’ time and one who will be ready in five years’ time. Taylor (1998) comments, in addition, succession planners have an input into decisions about the numbers of graduates that are employed on graduate training programmes each year. In technical terms, succession planning involves collecting and manipulating data about individuals and tracking their performance and progress as they move from job to job over a period of time. 3.7.2 Career Planning This type of HRP is by some viewed as a more fashionable term to use than succession planning and ostensibly is more individually focused (Storey, 1995). Furthermore, like succession planning, broadly interpreted, it requires an understanding of processes that can integrate an individual’s characteristics and preferences with the implications of: organisational culture, values and style, business strategy and direction, organisational structure and change, reward systems, training and development system, appraisal and promotion systems. According to Taylor (1998), career planning emphasises much more on the individual’s responsibility for his/her own career development. ‘Mentoring’ and ‘coaching’ systems, whether formal or informal, may be introduced to assist in this. Storey (1995) argues that common problems associated with this kind of planning are related to key people leaving, or to managers’ lack of broad experience. The requirements of different types of organisations (static; fast growing; international etc.) for detailed planning clearly vary (Ibid). Storey further states that the need for creating ‘bridges’ between different occupations and for the identification of ‘development positions’, are both significant techniques in career planning. The predominant influence of this type of planning is that of the organisation’s needs, as interpreted by particular managers, at certain phases of its development and it is said that career planning may be interpreted very differently by those who experience it (Storey, 1995). Storey continues to say that the ‘myths’ of the organisation in this sense may also be significant: “those who decode them appropriately are those who obtain advancement.”
Chapter 3 3.7.3 Contingency Planning
Contingency planning is seldom given any attention by authors within the HR field, but according to Taylor (1998), it can be seen as an approach that is almost universally applicable. Contingency planning involves planning possible responses to a variety of potential environmental scenarios, and the result is that HRP effectively switches from being a reactive process undertaken in order to assist the organisation in achieving its aims. Taylor further argues that it becomes a proactive process undertaken prior to the formulation of wider organisational objectives and strategies. The main purpose of contingency planning in the HR field is the provision of information on which decisions about the future directions the organisation takes are made (Taylor, 1998). 3.7.4 Competency Planning Another adaptation of traditional HRP is skills planning and is, according to Speechly (1994), particularly appropriate in situations where there is a variety of different methods by which employee needs can be met. The basic principle of this method is to shift away from a focus on planning for people and instead concentrate mainly on skills. Taylor (1998) argues that instead of forecasting the future supply of and demand for employees, skills planning involves predicting what competencies will be needed one to five years ahead, hence, leaving open the question of the form in which these will be obtained. Further, skills-based plans incorporate the possibility that skills needs are to be met either wholly or partially through the employment of short-term employees, outside consultants, as well as by permanent members of staff (Taylor, 1998). 3.7.5 Soft Human Resource Planning There has been some disagreement in the literature over the term ‘soft human resource planning’ and its perceived meaning (Taylor, 1998). Marchington and Wilkinson (1996) give one broad definition as being ‘synonymous with the whole subject of human resource management.’ Torrington and Hall (1995) have a narrower definition involving planning to meet ‘soft’ HR goals –
allowing them to build these considerations into their general planning processes. even more essentially argued by Taylor.Chapter 3 Theoretical Framework particularly cultural and behavioural objectives. 32 . Torrington and Hall also use the label to give meaning to a distinct range of HR activities which are similar to hard HRP in approach. they also need to make sure that people have an appropriate outlook and set of attitudes. but with a focus on forecasting the likely supply and demand for particular attitudes and behaviours rather than people and skills. In order to contribute to the creation of a successful organisational culture. by undertaking systematic soft HRP organisations will be alert to long-term shifts in attitudes to work among the labour force in general. According to Taylor (1998) soft HRP can thus be seen as a broadening of the objectives associated with the traditional approaches of HRP. Further. Such issues are not taken into account by traditional HRP according to Taylor (1998). Soft HRP accepts that for organisations to succeed in the current environment they need more than the right people in the right place at the right time.
non-static information such as number of employees might have changed dramatically by the time of print. HRP consists of more or less the same model and progresses as it did ten years ago with one exception. Each case study starts out with a presentation of the organisation. stretching a year into the future.000 employees globally. Another part of ESP concerns planning of personnel and competence. internally known as Ericsson Strategic Planning (ESP). Ericsson is a Swedish company and their head office is located in Stockholm.1 Ericsson Ericsson was established in 1876 and is the largest supplier of mobile systems in the world with a global presence in more than 140 countries. Reasons. 40. the empirical findings that have been collected from the companies studied are presented. 33 . based on the technique required for producing the desired products. These are factors that we consider relevant to our analysis.Chapter 4 Summary of Empirical Findings 4. The other process is the long-term planning process.000 in Sweden. 4. without sudden and unpredictable shifts in the market. in which they plan for competence needed in the future. At the time of this research. Summary of Empirical Findings In this section. Sweden. At times when the telecom industry is in its ‘normal’ condition. However. with approx. Ericsson had around 70. constituting the general business strategy and stretches three to five years ahead. Motives and Approaches to HRP HRP at Ericsson consists of two main planning processes. today’s shorter cycles increase the speed of change. due to recent turbulence in some of the industries that we have analysed. One process is a short-term forecast that runs quarterly. in which we will briefly describe their industries. whether they have an international presence or not and the size of the company in terms of employees. The ESP is done annually and includes a scenario part in which the organisation is looking at social trends in order to come up with a few potential futuristic scenarios.
Great emphasis is put on the linkage between HRP and the business strategy. Ericsson’s motive behind HRP lies in the planning process and not in the actual plan. responsible for decision. the top management at Ericsson communicates a certain process that is to be followed wherever in the organisation the recruitment is taking place. The essence of HRP is to leave the daily work for a while by looking at the situation from a wider perspective. In order to reduce subjectivity in the recruitment process and HRP. However. it is difficult to plan for HR more than three years ahead. and business unit managers with the responsibility for short-term planning. 34 . and the person responsible for management support globally and a few business unit managers. which in turn create a sound platform on which Ericsson can establish more accurate forecasts about the future. This enables them to better understand the surroundings and competitors. there is always one goal connected to employees. HR constitutes an equal share of the general business planning on a three years time span as does technique or sales. the HR director. such as recruitment requirements. The motive for having a scenario-based HRP is also to prepare for alternative ways instead of rigorously following a main scenario. This process implies that at least three persons are to be involved with equal decisionmaking power. thus reducing the linking ability somewhat. This committee consists of the deputy managing director. Ericsson is working after the Balanced Scorecard (BSC) concept in order to facilitate the linkage between HRP and the general business strategy. but according to Ericsson. The BSC implies that employee issues are considered throughout the organisation and that.making concerning long-term planning. among each manager’s goals. Thus. A committee has been established in order to ensure that a number of objective aspects have been considered before a management position is filled.Chapter 4 Summary of Empirical Findings The people involved with HRP at Ericsson are top managers. the planning process contributes more value to the organisation than the numbers in the final HR plan.
They say that to plan ahead does not necessarily mean to plan only for expansion and growth. human compassion. Ericsson argue that due to their core values (professionalism. the world economy. in times when the market is unstable. In connection to the annual overview. Ericsson carry out a scanning process to analyse the business environment.” Ericsson has the same HRP routines in times of downsizing as they have in times of growth and expansion. it is necessary to plan for reductions and new competencies when inventions of new techniques have the potential to make special competence within Ericsson obsolete. and relevant industries. they are less 1 Own translation of Ericsson’s core values: professionalism. Flexibility is achieved by freezing less internal costs regarding assets such as facilities. These factors are all considered in the planning process. during extensive recruitments and in times of competence development. these laws and regulations are under continuous coverage. and long-term planning1). the HR department is involved more in times of great growth. it can be devastating. According to Ericsson. they are affected by a variety of laws and regulations. and personnel. medmänsklighet och långsiktighet 35 .Chapter 4 Summary of Empirical Findings Ericsson argues that flexibility is a necessary ingredient in times of great uncertainty with rapid changes in the business environment and when the organisation is having difficulties to plan with accuracy. In order to map the potential affects they may have on the HRP process. in order to untie capital that may be invested elsewhere upon sudden need. Operating in such a turbulent environment as today’s telecom industry. than it is in times of less fluctuation and change. political trends. when competence requirements are shifting. to follow a plan rigorously without any flexibility and to avoid such inflexibility they use a scenario planning approach. different trends. As a global company. Ericsson specifically raises the problematic issue of retaining the latest and often most relevant competence when dealing with the regulation “last in first out. The HR department does its own environmental scanning on an annual basis and look at factors such as shifts in people’s values. and evaluating the market according to customers and the world economy. External and Internal Influences on HRP According to Ericsson. equipment.
Ericsson says that the reason why the level of employee loyalty stays constant throughout generations is that each generation has the same need for safety and certainty in their lives. thus the rate is not affected by economic climate at all. At Ericsson’s facilities in San Diego. the current recession in the telecom industry is likely to have a negative impact on students’ attitude towards the engineering profession. The gap between supply and demand for competence is clearly a problem that Ericsson is aware of. The fluctuation in the world economy and political decisions world-wide affect Ericsson to a great extent. the decision to impose taxes on the organisations within the telecom industry by assigning a fee to licenses means that Ericsson and other telecom companies have to make extensive investments with long payback time. while in Sweden it varies between 1. The employee turnover at Ericsson is strongly affected by the economic climate. In their attempt to reduce the gap and in order to influence potential employees’ attitudes toward Ericsson as an employer they work together with different schools and organisations. For example. the IT trend a few years ago did increase the employee turnover for a while. This can be explained by the fact that Americans tend to be less loyal to the organisation than the Swedish employees.9-8%. In China with its central governing system. 36 . However. In other words. the short-term planning is affected by the longterm planning. The turnover rate also differ from one country to another. the HR department is of equal value to the organisation. but according to Ericsson. the employee turnover rate is constant at 1-2%. In an economic recession the employee turnover rate is low and vice versa. According to Ericsson. Ericsson can see some changes in behaviour from generation to generation but it is merely trends and no radical shifts. does not affect a whole generation’s attitude towards loyalty.Chapter 4 Summary of Empirical Findings sensitive to economic fluctuation compared to other organisations and no matter economical climate. USA the employee turnover rate is normally between 10 to 20%. such as Svenskt Näringsliv.
The mobility of employees is seen as an important part of making the organisation flexible. Handelsbanken has about 540 offices in the Nordic region and 7 subsidiaries. this is nothing that Handelsbanken plans for which means that they do not conduct long-term HRP. however. Handelsbanken has dealt with HRP in this manner since the early 70s. They believe that the banking industry will require fewer employees in the future. They argue that this type of long-term downsizing will take care of itself. 37 . The internal factors such as organisational size and a complex structure have greater influence on the planning process and make it more difficult to plan than the external factors. Ericsson believes that in the future it will be increasingly important to have employees with social competence as well as other generic competencies across the organisation. At the time of research Handelsbanken had around 9. established in 1871 and the head office is located in Stockholm.200 employees globally and the western region had about 750 employees. Reasons.2 Handelsbanken Handelsbanken is a Nordic universal bank that offers all kinds of services within banking for both companies and private persons. Ericsson is therefore working with the development of more sophisticated networks that enables their employees to perform their work outside the office. Outside the Nordic region the bank is represented in nearly 20 countries. Other external factors that affect the HRP process are the market and the customers. Ericsson believes that the mobility of employees is a trend that will stay and therefore worth investing in.Chapter 4 Summary of Empirical Findings Technical developments such as automation and IT are factors that clearly affect HRP at Ericsson. 4. Motives and Approaches to HRP According to Handelsbanken they try to keep the organisation as tight as possible in order to avoid recruitments and redundancies. Handelsbanken is a Swedish company.
The prediction that there will be a demand for fewer employees in the future is believed to be a result of improved IT and more competent personnel. However. this linkage appears to be vague. which is also relevant to employees and competencies. McDonald’s business idea is to offer a fully developed business concept to approved franchisees. 38 . They also state that every vacancy is advertised internally so that everyone has the same chance to apply for the job. it is up to the office manager to decide whom he/she wants when recruiting internally. 12. According to Handelsbanken. According to Handelsbanken. Until today.Chapter 4 Summary of Empirical Findings Handelsbanken say that long-term HRP is very difficult to conduct and they do not see any major reason for practising it and are therefore very ad hoc in their HRP.3 McDonald’s – Sweden McDonald’s is one of the largest restaurant chains in the world. when recruiting externally it is the top management that makes the first selection even though it is the office manager that makes the final decision. 230 restaurants in Sweden. Handelsbanken tries to restrict the redundancies to temporary workers only. which means that they have a very low employee turnover rate. Handelsbanken states that they have certain recruitment criterias. However. for example all employees are required to have a university degree. it is merely a prediction and Handelsbanken does not plan for it and argue that once they get there. In their attempt to avoid redundancies. This means that some long-term HRP is considered even though there is no formal plan for it. Yet. they assume they will employ the right people with the right competencies. the HR department works closely with the regional offices. Handelsbanken say that they have never discharged anyone due to the lack of workload. and has approx. which could be seen as a way to link the HR strategy with the business strategy. The Swedish head office is located in Stockholm and has about 250 employees and the total workforce in Sweden amounts to approx.000. one of the core values in the organisation is long-term thinking. as there is no planning for HR evident in Handelsbanken. 4. However.
Each business unit manager leaves proposals based on their business unit’s needs. the continuous and most of the time sub-conscious work (the evaluation of an employee’s daily work by his/her manager) with finding potential successors to leadership positions is to a great extent influenced by subjectivity. both for recruitment and the overall work for HRP. Since the start of the program the turnover rate of leaders has decreased considerably. At McDonald’s. McDonald’s argues that the leadership program can explain the reduced turnover rate. HRP at McDonald’s has taken a drastic change compared to what it used to be in the past. the HR work consists mainly of education and development and they say that it is impossible to look further than three years ahead. Motives and Approaches to HRP McDonald’s develops a HRP that reaches three years ahead and is reviewed quarterly and annually. In 2001. McDonald’s added a leadership program to its HRP with the motive to retain leaders within the company. USA. Before the start of this program there were no descriptions or qualification criteria expressed for any of the positions in the organisation.Chapter 4 Summary of Empirical Findings Reasons. if any linkage at all. Much of the HRP work at McDonald’s is focused on career planning and succession planning in order to develop individual plans for the employees. developed by an outside expert. The recruitment work is to some extent influenced by the head office in Chicago. McDonald’s use different support instruments such as job profiles. the Chicago head office decides how many employees the Swedish head office should have. The HRP work and the recruitment process involve a top management team consisting of four people and a lower level management team consisting of ten to fifteen people. However. in their attempt to minimise subjectivity in the recruitment process. the linkage between the general business strategy and HRP is scarce. According to McDonald’s. The competences profiles that are used in the 39 . as today’s leaders are able to forecast their futures within McDonald’s. but it is not perceived as a problem. For example. McDonald’s did not have an HR function up until 1994.
McDonald’s argue that it can be dangerous to follow a plan rigorously. it is possible to measure the returns on investments made in the HR work and they are currently developing a system that measures the outcomes/returns from such investments. McDonald’s has to consider laws and regulations. However.Chapter 4 Summary of Empirical Findings recruitment process are purely based on today’s reality and are not affected by the three-year plan. External and Internal Influences on HRP When planning for HR. McDonald’s say that. The HR department at McDonald’s achieves less attention and finds it more difficult to motivate investments in soft resources (human capital) in times of economic recession compared to times of economic boom. especially those concerned with redundancy. The market department does all the research and therefore the HR department must leave a proposal to the market department if they want any research for their own account to be carried out. They revise the three-year HRP annually and sometimes even quarterly in order to update and adjust the plan according to changes and current conditions. it is difficult to say whether or not it is possible to measure the outcomes of the planning. McDonald’s argue that it is easier to plan for HR in the USA than it is in Sweden where stricter laws and regulations must be considered. this plan should be presented as career possibilities and then provide the environment that facilitates those possibilities. According to McDonald’s. McDonald’s scans the business environment annually by looking at trends in the society and the world economy in order to analyse customer purchasing power and recruitment opportunities. especially leaders. According to McDonald’s. this is due to the difficulty of measuring economic return on soft 40 . According to McDonald’s. By doing this. the employee is responsible for his/her own careers. by developing career plans for everyone in the organisation. the purpose of HRP is to achieve a more competent workforce and to retain employees.
According to McDonald’s. The economical climate almost has a reverse effect on McDonald’s.4 Mölnlycke Health Care Mölnlycke Health Care is one of the worlds leading manufacturers of singleuse surgical products. Mölnlycke Health Care has approximately 4. 4. about 3. They therefore make efforts to develop a program that enables them to measure the economic return on soft investments. Of these. McDonald’s recruit most of their leaders internally and their own business school. Job-hopping has become a trend and McDonald’s turnover rate of leaders has increased significantly even though it decreased somewhat when they introduced their leadership programmes in 2001. being the giant within the restaurant industry often means that McDonald’s receives a lot of attention when critique towards the industry is given in media. The company also has a strong international standing in the professional wound care sector.Chapter 4 Summary of Empirical Findings investments. to some extent. However.000 employees. reduces the gap between supply and demand for competence. According to McDonald’s. IT has had a great impact on HRP and made it possible to develop a recruitment and succession system that truly improves the planning of human resources. in an economic recession people tend to increase their purchase of fast food. They conduct appraisals with their leaders regarding career plans in order to retain as many leaders as possible. external factors such as worldwide political incidents have little impact on the HRP process.300 are involved in production at factories. Customers’ purchasing power and behaviour also differs depending on geographical location within Sweden and this is something that McDonald’s take into account when they plan ahead. McDonald’s believe that the lack of career plans for McDonald’s leaders before 2001 is the greatest contributor to the increased employee turnover rate. 41 . McDonald’s argues that the attitude among employees regarding loyalty towards the employer has changed a little. However.
the HR department. However. in order to be flexible. it is the top management group that has the main responsibility for the strategic HRP questions. however. The strategic plan stretches three to five years ahead. at least once a year. MHC is today an international company. Even though it is the manager who has the overall responsibility for the selection process. react to changes and competence requirements. especially when discussing key positions. who are in those positions now and possible candidates to replace these employees. MHC argues that it is easy to avoid subjectivity when checking the formal merits of candidates but the personality of candidates is a 42 . what they are. it is continuously revised. According to MHC it is easy to become subjective in the recruitment and planning process and it is therefore important to have many persons involved in the selection process. Reasons. the HRP today is different compared to ten to fifteen years ago. every department and line manager works continuously with this process. often conducts some sort of an analysis with external support in order to get as many parameters as possible. Sweden. For example. The head office is located in Gothenburg. MHC does this in order to have employees ready to replace positions and stay alert. Motives and Approaches to HRP HRP is considered to be very important at Mölnlycke and is one of their strategically most important key questions.Chapter 4 Summary of Empirical Findings Mölnlycke was established as an independent company in late 1997 through an acquisition and merger of the respectively clinical divisions of the SCA/Mölnlycke Group in Sweden and Tamrå OY in Finland. Furthermore. According to MHC. The current business environment is much more turbulent with rapid changes and they do not have as much time to plan as they did in the past. which means that they have more fluctuations within the company and therefore have to be more flexible today and understand these forces. as far as possible. According to MHC. handle their global strategic key positions according to a plan. This means that they try to. The different market company’s have meetings which they call organisational management reviews where they discuss issues such as key positions. more people are involved.
By having an agenda. According to MHC. they have better prerequisites and it is the reason why they run their leadership development programmes continuously since it is a part of the process to get the succession planning to work. on the contrary they believe it is important to conduct HRP to stay flexible and get the knowledge and understanding of how reality looks like. 43 . MHC argues that it is up to the HR department.and investments on developments are required to move ahead. which is a support resource. how much the company has to recruit and if it is possible to get the necessary competencies required in the country in mind. This is considered important. MHC’s plan is to be able to appoint 75% of all key positions with internal resources but also believes that it is important to recruit externally. what the consequences are. the general purpose for conducting HRP is to be ready for changes and movements within the organisation so that you always have someone to replace vacancies. Another goal according to MHC. The task for the HR department is to let the organisation know the consequences of a certain business decision from a personnel point of view. However. The reason behind planning should be to realise where you have the gaps and what competencies. when the company decides to expand. MHC do not feel that they loose flexibility by planning. According to MHC it is important that HR is represented in the top management group and does not report to some administrative unit because then the HR department will lose its influence. they do not believe it is possible to plan after a strict system because it will fall apart fairly soon since the reality and human being do not fit into these strict systems.Chapter 4 Summary of Empirical Findings subjective judgement and this is why MHC tries to have many people involved in the process. to continuously synchronise its strategies with the overall business strategy. is to be able to assist employees in their career planning so that they can control the succession planning and it is therefore important to have some sort of agenda. Employees have a free will and will act from that. It is then up to the HR department to inform whether or not it is realistic to grow so rapidly.
they can see how they have replaced these key positions and how they have succeeded by using this process. MHC is using various ways to scan its business environment for information. that MHC can present this and that they have a policy around the recruitment process regarding internal recruitment. In the strategic plan MHC plans for growth. According to MHC. The first category is if the employee leaves of free will to another company. Much of the information comes from the different market companies around the world. which is based on the information collected. During a recession they deal with issues such 44 . the information comes mainly from the different market companies. However. MHC says that it is the HR department that conducts the organisational management reviews. External and Internal Influences on HRP MHC argues that different kinds of policies are important and affects the planning process much more the employment laws do. MHC also measures the turnover rate in key positions and has three categories for this process. The effects of not being careful with this issue could mean that you internally demoralise the whole organisation. the second is when MHC has failed with the selection process and asks them to leave and the third is if they have left due to other reasons.Chapter 4 Summary of Empirical Findings By having the goal to appoint 75% of key positions with internal resources. However. Since they have organisational management reviews in all markets they do not only discuss one specific market but the whole organisation. it is possible for them to measure whether the goal is carried out over the year or not. According to MHC. It is important that the employees feel that they are treated with fairness. They also have a department called business intelligence that works with different kinds of business scanning. However. which means that a strong recession obviously affects the plan. this process must be carried out over a couple of years in order to become valid and effective in a statistic way so that they can establish a trend. have goals for growth in different markets. MHC argues that the HR department does not lose attention in a recession but that they deal with different kind of questions during an economic boom and an economic recession. it is very important that the company has good company ethics.
MHC say that they can see a change in attitudes in the workforce. especially in the wound care area. particularly in the research area. MHC argues that the internal factors influence HRP much more than the external factors do. They argue that it is important that top management has patience and not always look at quick returns. automation has influenced the way they conduct HRP. MHC says that. They work a lot with Chalmers University of Technology and have different job fairs to market themselves. The fact that they are internationally present with many small own market companies has influenced HRP and there are more issues such as different cultures and language barriers to consider. They argue that they try to influence and see different trends. 45 . According to MHC. incidents such as the fact that Ireland (2002) voted in favour of expanding EU affected them positively in the sense that it is easier for them to go into new markets. However. in that sense it might be an advantage that they are not listed on the stock exchange. The technological changes have forced them to look at what competencies are required ahead. In order to manage competence supply and demand MHC tries to work closely with universities and focuses especially on the engineering side and research work within wound care because it is MHC’s greatest high tech area.Chapter 4 Summary of Empirical Findings as how they can make the organisation more cost-effective and in an economic boom they focus more on recruitment issues. According to MHC they are not very sensitive to political and international occurrences since they are not affected by the business cycles as much as other industries. MHC also look at what competencies they believe they need in the future and that it is very important that they have a close dialogue with the universities in order to get the right people with the right competence in the future. not necessarily that people leave the company but employees have higher expectations on careers today compared to ten to fifteen years ago.
According to MHC this is an area that should be dealt with earlier. Sahlgrenska was founded in 1899.and recruitment out of organisational assignments and the economical frameworks. for HRP and competence development. The hospital has approx. It is not only important that the managers’ possess social competence but should work across the whole organisation. 17. Reasons. describe a collected picture of the demand for recruitment and 46 . With social competence MHC means the ability to understand yourself and others. SU is divided into ten operational areas and Sahlgrenska.5 Sahlgrenska Universitetssjukhuset Sahlgrenska Universitetssjukhuset (SU) is the largest hospital in Northern Europe.Chapter 4 Summary of Empirical Findings In the future MHC believes that social competence will be increasingly important. take advantage of differences and be able to communicate more efficiently. One important condition is that the actions in the budget process are analysing and describing the demand for competence. They argue that it is complicated to develop social competence while technical competence is something that you develop naturally. already in schools and universities. Motives and Approaches to HRP HRP and competence development are areas that are given high priority at Sahlgrenska and the region of västragötaland. Mölndal and Östra were merged into one. The purpose is to describe the structure of the personnel. this requires strategic and long-term work with HRP and competence development. According to Sahlgrenska. Mölndal and Östra are three of these areas. SU has a three-year action programme. The analysis should involve estimating demand for competence and recruitment three years ahead and according to this an action plan is developed. Sahlgrenska says that they have an important role since they are a university hospital.000 employees and is spread over several geographical areas in the Gothenburg region. This would mean that they could build more effective teams. 4. development and educational activities they should also contribute knowledge and methodology to other hospitals in the region. which is revised annually. but its current structure was established in 1997 when the emergency hospitals of Sahlgrenska. Apart from running comprehensive research-.
The number of employees with university degrees have increased as well as the average age. nurses and medical secretaries have in recent years been under-dimensioned and does not live up to the demand for recruitment in the health care industry. with the right competencies and personnel composition that is required to achieve the vision of the hospital and accomplish the mission.Chapter 4 Summary of Empirical Findings suggest activities. Sahlgrenska is divided into different organisational (such 47 . According to SU. The action plan also involves making SU an attractive employer to promote the organisation to graduates and potential employees. SU says that they have a situation where there is a lack of competence in certain groups and that this is evidence that they have not been effective when conducting long-term competence planning up until today. SU says that the education volume for doctors. These are all reasons to why HRP has become more important but at the same time increasingly complex compared to ten years ago. SU says that it is more difficult to conduct long-term HRP today compared to ten years ago. Now they have to look at supply and demand for competence. In general. In recent years the rapid developments in medical technology have contributed to an increase of specialists within many different occupational groups. The number of employees has increased during the past ten years and at the same time the different hospital organisations describes an increased demand for personnel with special competence. while compared to other industries the employee turnover is low. They also work together with the personnel management group and the HR department in each operational area when they develop the action programme for HRP. This is mainly due to a successive increase of retirements and more movements between industries and internationally. They also say that the requirements on HRP today have increased due to many other factors.and competence development group that is responsible for the HRP. SU has a HRP. which fosters HRP and competence development in the overall hospital activity plan. Furthermore. the demand for recruitment until 2010 will increase in the health care industry. the goal is to have the right number of employees.
Orthopaedic psychology) and each area has a nursery department manager (which according to SU can be compared to line managers in a business organisation). According to SU. This can be seen as the linkage between the general strategy and the HR strategy. the university and the political organisation. This will create the foundation for the planning of coming activities. SU says that they are actively out on job fairs for all categories and have open house sessions to market SU as a brand name. are more flexible and are not afraid to change employers. they have representatives from the world of research. which means that many different interests are involved. it will enable them to analyse whether plans have been carried out and if they have had the desired effects. the trend is that employees move 48 . According to SU the attitudes of the work force have changed a lot. External and Internal Influences on HRP SU says that they work closely with universities and that SU is closely linked to the Academy of Sahlgrenska and that SU is a research hospital. Today the younger workforce values completely different things and has more demands on the organisation. They say that it is a completely new generation with other values and attitudes compared to 20 years ago. which makes the HRP process more complex. It is the personnel political department within SU that collects all the information regarding supply and demand on competence and other overall hospital related information. SU says that by doing follow ups.Chapter 4 Summary of Empirical Findings as ER. SU says that follow ups of the action programmes and action plans should be conducted in connection to the organisational planning and budget process. causing difficulties when conducting HRP. They do not always share the same opinions and these opinions can often be very contradictory thus. For example. These departmental managers have the responsibility for the personnel within their area with support from the HR department and are responsible for the planning of their personnel. According to Sahlgrenska there are some factors. The politicians give directives to what SU should achieve which in turn has to be integrated with the research area.
The SAS group has about 31.000 employees according to the annual report from December 2001. they only conduct HRP on a short-term basis and never plan for more than one year ahead and the plan is revised continuously. Motives and Approaches to HRP SAS’s HR-department went through a restructure in 2001 and is now a business unit. The SAS group is divided up into business units and every unit work individually with the recruitment and planning. Reasons. According to SAS. and sells HR services to the other units in the organisation.6 Scandinavian Airlines System Scandinavian Airline System was established in 1946 through a merger of the 3 then national airlines DDL of Denmark. 49 . DNL of Norway and SILA of Sweden. In the past SAS used a schematic planning and competence development process but are today conducting short-term HRP. SU believes that it would be increasingly important in the future to have specialist competencies within many different occupational groups. 4.Chapter 4 Summary of Empirical Findings from one department to another to get experience and training and rarely stays in the same department for a long period of time anymore. there are some overall values and methods regarding recruitment and planning which is communicated from the top management group. However. They also argue that career planning can be dangerous because it gives the employees career expectations and when the company cannot meet these expectations the employee will be disappointed and thus experience dissatisfaction. which is called Human Resource Services (HRS). however. this figure is probably much lower since there have been extensive redundancies during 2002. According to SAS they have a very low employee turnover rate and that it has always been like that. They argue that the HRP process is very ad hoc and that SAS have never felt the need to plan far into the future.
They do this by estimating the demand for personnel and competencies for the coming year and then match current resources with the estimated demand. SAS argues that it is important that HRS has a good understanding of the business strategy so that they can recruit. customs. 50 . even though market changes are difficult to predict SAS argue that you have to plan for different scenarios to be ready for changes. By planning one year ahead they aim to have the right resources allocated to secure that they have the right competencies available. plan for redundancies and develop the right employees according to the general business strategy. Furthermore. regulations regarding employment rights and the union have great affects to the management at SAS. SAS argues that the purpose of the HRS unit is to make the organisation profitable and the overall HRP goal is to have the right persons in the right places. which is a part of the business scanning process. External and Internal Influences on HRP SAS states that law. SAS says that they have recently placed their HR executives in the top management group in order to get a clearer picture of what the purpose and what the HRS is supposed to deliver. SAS argues that because of this reason there is a lot of subjectivity in the recruitment and planning process but it has never been considered as a problem. especially the HRS unit. and political agreements affect the HRP at SAS a lot. It is the HRS unit that undertakes the majority of business scanning but the company also buys external surveys. There are sometimes rapid changes in laws and customs that are difficult to predict which complicates the planning process. since every business unit is responsible for their own recruitment and planning. They also say that laws. in order to predict work force demand they conduct demographic analyses. However. According to SAS it is difficult to say whether all the HRP they conduct is meaningful. the recruitment is based on qualities and criteria that match with the qualities of the unit manager.Chapter 4 Summary of Empirical Findings SAS says that.
However. They argue that they have always been successful at recruiting the competent people and that they work intensively to market SAS as an attractive employer. By tradition. especially for such a big. SAS says that. This means that SAS have had problems getting new blood into the company. the occurrences have a great impact on HRP. The self-righteousness also effects 51 . Some examples of this are deregulation of the airline industry. It is often difficult to plan for these. the 11th of September and a potential war involving OPEC. however. which complicate the HRP outside the current economic phase. once you enter the company you stay for life. HRP at SAS is very influenced by political and international occurrences. SAS have always had very low employee turnover rates and in general.Chapter 4 Summary of Empirical Findings According to SAS they are extremely sensitive to changes in business cycles. which has the greatest impact on HRP. out of the external factors it is the political factors such as decisions regarding competition. this means that they do not need HRP and that the competence they need currently and will require in the future is always available. According to SAS. which lives on old qualifications and its history of being an attractive employer. according to the SAS this is something that good HR managers should be able to avoid and it is at times of downsizing that you really need the HR department. They say that they have much more time for HR issues during an economic boom while in an economic recession it is the first department that has to downsize. SAS say that until today there has not been a need to control the demand and supply for skills on the labour market. however. According to SAS there has not been any remarkable change in the attitudes of the workforce. the example given is that it is not profitable with more than one Airline Company on one route. By selfrighteous SAS means a company. However. SAS argues that it is the internal factors that affect the HRP the most. heavy and self-righteous company as SAS. sometimes political decisions do not have the affect that you had planned for and this is mainly due to economical factors. it is has never been considered as a big problem.
Chapter 4 Summary of Empirical Findings benchmarking to a certain degree. the difference between HRP today compared to how it was conducted in the past is that you cannot plan in such a rigid and militaristic fashion anymore. Motives and Approaches to HRP SKF sees HRP as a process concerned with competence development and ensuring that there is a renewal of competencies. how to make individuals take responsibility for his/her own development and how to create the environment that stimulates such responsibility. SKF was established in 1907 and is the leading global supplier of products. It is rather an internal process. SKF says. 24 countries and has sales companies in 70 countries. According to SKF. SAS believes that in the future they will look for employees with general competencies and business-minded people. Reasons. The company has around 40. New players on the market and new strategies to run business within the airline industry have forced SAS to listen to the customer requirements and be open to benchmarking. the HRP work is becoming more and more similar for all types of employees. SKF do not have a set strategy for the number of years ahead the plan should stretch. solutions and services in the rolling bearing and seals business. This is partly because job tasks are increasingly complex but also because of the general improvement of educational standards among the work force. SKF say that. changes occur more rapidly in much shorter time spans. According to SKF. you cannot have a plan that says that X will 52 . which aims at creating and increasing the flexibility among the employees. Today. they work with questions such as how to be flexible enough to make use of the existing competence. across the entire organisation. 4. Thus. that there is not a great difference between different job categories anymore.000 employees with a global production in approx. for example. They also conduct gap analysis by mapping their existing competencies and compare those with future competence requirements.7 SKF Sverige AB SKF is a Swedish company and has its head office in Gothenburg.
There is. for example. Competence is not only knowledge but also experience and self-esteem. SKF tries to have a flexible but yet systematic approach to HRP. However. The worst scenario when following a rigid plan is when you fulfil the plan even though you know that is the wrong way to go. one problem that they do identify is that employment laws can stifle the flexibility in the 53 . but rather prepare for the future. it is difficult to realise a three-year plan and that you should not decide what is going to happen in the future. there is a mixture of people with the professional knowledge as well as someone from the top management group involved in the recruitment process. However. the HR department’s task is not to be involved in the actual recruitment process. They argue that.Chapter 4 Summary of Empirical Findings take Y’s job tomorrow if Y dies in an accident. SKF says that subjectivity concerning the recruitment process is something that companies always have to consider and work with. they at least have a systematisation of the subjectivity. External and Internal influences on HRP According to SKF. If you plan in this way you tend to make little progress. a team for supply chain. if they manage to create an environment where people can grow and develop. SKF argues that. They also try to involve more people in the recruitment process in order to lower the level of subjectivity. SKF say that they are a bit sceptical to having a formal planning process. According to SKF. HRP will take care of itself. they do not consider employment laws and involvement by the trade union as any problems when conducting HRP. SKF say that this is mainly because they have a very knowledgeable union. These are factors that SKF try to work with in order to create an environment where people plan for their own future. where the managers for the different supply chain departments are responsible for the recruitment. According to SKF. SKF say that. but to make sure that the team that is responsible does their job. they claim that by working with recruitment the way they do. the main reason for having HRP is that SKF is afraid that they will not have competent employees when it is required.
they do not employ a lot of people compared to many other companies. however. SKF say that they have seen some change in employee attitudes. 54 . They also note that people demand more from their employer than in the past.Chapter 4 Summary of Empirical Findings way you utilise the workforce. but SKF say that. but more a logical development. which means that they put more emphasis on working with the environment and try to create development possibilities. SKF agrees that in their case. SKF’s HRP is affected by these changes. The problem with technology in connection to HRP is rather how to find technicians and engineers that master both new and old technology. Business cycles mainly affect HRP. SKF says that they need to work more with making people feel that the company has noticed them. the internal factors such as organisational structure and management style influence their HRP more than the external factors. SKF cannot decrease their working hours just to meet the current work required when employees are under full time contracts. SKF does not actively scan the supply and demand for competence in the labour market. SKF do not want to fire a lot of people in an economic recession. for example. they are in a stable industry and thus not very influenced by the business climate in general. One way in which new technology and IT has changed HRP at SKF is that the previously quite large group of administrators is almost completely gone. This is a narrow sector of competence. According to SKF. this is however not a problem. One obvious reason for this is that SKF is relatively insensitive to. Thus firing employees in economic recessions becomes the most viable option. and therefore do not feel the same need to be updated in this field. new technology and economic fluctuations and that they are a leading company in a stable industry. which is tied to production. Employees today are less patient and become nervous if nothing has happened to their careers in two years.
Chapter 4 Summary of Empirical Findings SKF argue that knowledge is made obsolete quicker today than before. if X died Y would step in. Reasons.” for example. The HRP work ten years ago bares little resemblance to how it is carried out today. and if you go even further back there was hardly any HRP at all.8 AB Volvo Volvo is one of the world’s largest producers of trucks. Volvo has a three-year plan which they revised every year and changed if necessary. 55 . They want people that are not afraid of changes and they will look for qualities that are hard to learn. However. 4. with production in 25 countries and operates in more than 180 markets. the further up in the organisation you look the more individual and position-focused it becomes. the planning at that time was more “militaristic. This means that SKF wants to recruit more attitudes and less knowledge in the future. Then they compare the plan with where they are today and carry out a gap analysis. buses and construction equipment and has a leading position in the fields of marine and industrial power systems and aircraft engine components. It is generally the HR department and the respective line managers that are involved in the recruitment process in the lower level work categories and there is usually a group of people to choose from that have been recommended by the line manager when a job becomes available. Volvo has today about 71. this is not feasible today as things happen much faster and you cannot count on things being static. Motives and Approaches to HRP Volvo sees HRP as a place where the company wants to be and what they want to achieve within a couple of years.000 employees globally and roughly 24. and based on this they decide what kind of competence is required to reach their goals.000 employees in Sweden. the Volvo Group focuses exclusively on transport equipment for commercial use. The company was established in 1927 and has its head office in Gothenburg. However. From 1999. Volvo’s HRP today is very different compared to how it was conducted in the past. According to Volvo. Sweden.
The planning programme for the top positions however. those laws that do influence the work are those related to diversity and equality. External and Internal influences on HRP Volvo says that HRP are not very influenced by employment laws. Certain actions that are taken are based on the business climate. The people that are involved in the HRP often tend to choose people that are similar to them. 56 . The HRP at Volvo is very affected by the ups and downs in the business cycles. Volvo expects HRP to enhance their competitive advantage by having the right competence. Volvo tries to involve the HR department in the general strategic planning and says that the linkage between HRP and the general business strategy is of great importance. However. they want to make sure that the strategic plan is kept flexible so that they are able to adjust it when changes appear.Chapter 4 Summary of Empirical Findings Volvo sees the issue of subjectivity in the recruitment process and succession planning as a great threat. The HR department is usually involved as a support unit and explains the consequences of any actions from a HR perspective. These laws are especially apparent when planning for Volvo’s American companies. but their activities are different in different economic situations. for example. is not affected by the business cycles and is carried out as usual. There are. more temporary employed people in an economic boom and more focus on competence development in an economic recession. the HR department is not neglected in an economic recession. According to Volvo. They use something that they call business cycle management. Thus. since such laws are especially rigid in America. thus making the selection process somewhat subjective. Volvo fears that if they plan too far ahead and too strictly they will loose flexibility and ability to adjust and therefore become stuck in the plan. There is a problem with the diversity in the top management at Volvo and this is something they work a lot with. The purpose with HRP at Volvo is to close the gap between what they have and what they want in terms of competence.
It has become more difficult to recruit people to management positions than it was for 5 – 10 years ago. are involved in a war. The ultimate result of a reduction in sales is of course that Volvo needs to either downsize their workforce or at least stop the recruitments. something that has become more apparent the last couple of years. however this is not seen as a major problem. Volvo offers various trainee programs in order to secure a constant flow of people to take over the positions that are made vacant. Volvo can clearly see some changes concerning attitude among the younger employees. The real challenge that comes from technological changes is to recruit. Before it was quite common that people starting their career at Volvo stayed there until retirement. Volvo also has their own upper secondary school were they foster future Volvo employees. the main problem according to Volvo is to keep track of and recruit good leaders and managers. they also try to influence students to study subjects that are related to Volvo’s industry. where Volvo has a large market share. The HRP at Volvo is affected in some ways by political and international occurrences. According to Volvo. The general effects are for example that in time of war the world economy can be slowed down which in turn affects Volvo’s economy. However. Another problem is to find repairmen and service technicians that handle the constantly more advanced technology. The main part of Volvo’s managers is taken from within. train and develop sales staff that is capable to sell and explain new technology to the customers. such as engineering and economics. one of the effects that new technology has on HRP is that new technical competence is required among engineers.Chapter 4 Summary of Empirical Findings Volvo tries to keep track of the Swedish educational trends and also look at what companies’ students choose. Apart from that. Volvo says that other external factors that have had an affect on HRP is the emergence of new lifestyle patterns and is an important factor to consider. People question the time they have to put in and what 57 . Volvo can also be affected if countries. but this is not the case anymore and people are more prone to change employer. but they try to recruit around 15 – 20 % of the managers externally.
These people are offered programs for training. If this is not considered you can end up with a majority of people that are specialised in certain areas. management style. There is a debate at Volvo concerning how many high potentials they should have. They will work a lot with having economists working in technical projects and technicians working in economical projects to increase the learning and development of people. They mainly influence training and development capabilities. According to Volvo. but at the same time they need promote an atmosphere where having a family is seen as something natural. In this respect it is important to consider they way a company is organised and structured. ambitious and intelligent persons will not sit around and wait for their chance to come. and these people are more difficult to replace if no one else works with the same tasks. When Volvo considers the future they believe that competence development is going to become increasingly important. It is important to have more responsibility at the lower ranks of the company. internal factors that influence HRP are such as the size of the company. Volvo considers this a problem and are trying to find a balance and say that they need to attract good managers that are willing to sacrifice a lot for Volvo. as this increases flexibility and more people can work with different tasks. 58 .Chapter 4 Summary of Empirical Findings they get out of it. development and preparation for future management positions. Volvo work with so called “high potentials” to make sure that they have people that can take over the 200 most important positions in the company. however. and Volvo has around 275 high potentials. According to Volvo it is expensive to conduct competence development but it is even more expensive with incompetence. it is also argued that 400 young. The high potentials should be able to take over the position within two years. culture and the structure of the company. Some people in the organisation claim that they should have as many as 400.
There are many issues behind this concept. thus we aim to analyse the effect their current business environment has on planning. we present and analyse the external and internal factors that influence the case study companies in their HRP. while the companies with less experience of such scenarios do 59 . A few of the companies studied (LME. 5.1 Reasons and Motives for HRP among the Case Study companies While there are many reasons for conducting HRP. we present and analyse the reasons and motives to conduct HRP among the case study companies. with the right skills. the essential motive is. We aim to solve our research sub-problems by contrasting and making a comparison of the different companies. We notice that the companies that point out the importance of such planning are those with a history of extensive redundancies. Even though the above constitutes the essence of HRP. All but one (HWR) of the case study companies specifically stated that this was the underlying motive for conducting HRP. Firstly. for example the costs of wasting resources on the wrong people. make sure that you retain the right competence for the present as well as for the future. to have the right people. in the right places at the right time. at the time of extensive downsizing.1. the cost of having the right person in the wrong place and undermining the development of a desired organisational culture.3 effective HRP can help anticipate potential future difficulties and develop effective personnel strategies for activities such as redundancies and retaining employees. Analysis In this section. there are other reasons for planning ahead. Thus indicating that no matter what industry or organisational size. the old concept of having the right person at the right place is still a crucial aspect of HRM. In this sense HRP can be a broader tool than just finding the right people. Secondly.Chapter 5 Analysis 5. As mentioned in chapter 3. we present the analysis of our empirical results. ABV) stress the importance of planning for redundancies in order to. as presented in chapter 3. which is indicated by a majority of the case study companies.
Furthermore. a majority of the case study companies see the retention of key competence as an important issue of HRP. However. have formal HRP stretching three years ahead. The school of theory arguing for long-term HRP says that planning has never been intended as blue-prints of the reality to come. forcing them to be reactive rather than proactive in such an event. This can be put in contrast with the fact that only a few of the companies studied plan for downsizing. except HWR and SAS. All of the companies that do plan formally say that planning for more than three years ahead does not add any value.5. and revised in depth annually. The planning is rather seen as a tool that can help managers to foresee changes and identify trends. or that there is a reluctance to plan for scenarios that you do not wish to happen. It is remarkable that there are still companies today that do not plan for anticipated redundancies. A major threat identified among the companies is that if you plan too strictly and too far ahead there is a risk of getting stuck in the plan. 60 .Chapter 5 Analysis not see the importance of that kind of planning. One company (SKF) expressed that the worst scenario would be if you realised a plan even if you know that it is the wrong way to go. We argue that it is important to make sure that you plan for retention of key competence no matter what situation. as mentioned in chapter 3. such as that the top management feels to secure. those companies that do plan argue that a flexible plan make them more prepared for changes and enhances their ability to faster adjust to these changes.4 and 3. to plan does not necessarily mean to plan for expansion and growth. The majority of the companies studied argues that planning needs to be flexible and adjustable to changes. The reluctance to plan for redundancies could be affected by psychological factors. Thus. All of the case study companies.2 Approaches to HRP There are two different schools of theory concerning the validity of long-term HRP presented in chapter 3. 5. In essence. the school of theory arguing against long-term HRP points out the impossibility of forecasting the demand for and the supply of labour with any accuracy. Mintzberg (2000) takes it even further saying that planning itself breeds basic inflexibility.4. These plans are examined quarterly.
if carried out in-depth. Furthermore. This has the potential. Worth mentioning is that this evolution of HRP among the companies studied has been equally dramatic in traditionally stable as in 61 . forcing the companies to re-evaluate their HRP. Unterman (1974) claims that because the world is increasingly complex and unpredictable it is not worth trying to predict what will happen more than a year ahead. We disagree with some of the arguments presented in chapter 3. there are a few companies that do not plan at all (HWR) or have an ad hoc approach to HRP (SAS). According to the theory in chapter 3. Their reason for not planning comes from the fact that they have never had any difficulties finding the right competence when required and they claim that this is because they have always been attractive as employers. For example. While Unterman seems to focus on the potential outcome of the plan.Chapter 5 Analysis Even though the majority of the case study companies conduct HRP. we would rather stress the importance of the planning process itself. to require more flexible planning today. The planning process forces the companies to carry out an indepth analysis of the current situation in terms of internal resources and how these resources are utilised. This change is evident among the case study companies. that the HRP function was anticipated to become the focal activity as it was increasingly becoming an essential function across the organisation. the reasons for not conducting HRP are based on other reasons than those presented by the school against HRP. it was due to the increasingly uncertain socio-economic climate during the 90s. if the company scans its environment as a part of the planning process. as we claim that these arguments are to general. where the nature of HRP has changed from being a militaristic and rigid way of planning some ten to fifteen years ago. thus. keeping the company alert to changes. This indicates that the theory against long-term HRP seems to have little relevance among the case study companies no matter what industry. more changes in shorter time cycles have forced this change to occur.4 about the case against HRP.2. However. According to the case study companies. to provide a solid foundation on which several realistic future scenarios can be based on. this will provide them with a wider perspective in terms of their business environment and competitors.
half of these (ABV.Chapter 5 Analysis turbulent industries. A few of the companies studied (MCD. i. companies that are more internally focused in their HRP have experienced low employee turnover rates for some time. as well as emphasising the importance of individuals taking responsibility for their own career planning. Thus. with the right skills. The general idea of HRP among these companies is that by providing an environment that fosters personal growth and development. According to theory described in chapter 3. The ultimate outcome should be that HRP takes care of itself. rather than the specific nature of the development. These companies mainly base their forecast on a gap analysis. One of the case study companies (LME) is focusing on scenario planning where the desired outcome is. their focus leans towards competence planning.7. MHC. through thorough environmental scanning. providing possibilities for individual development and creating individualistic thinking. SKF) emphasise on the latter issues. Furthermore. When categorising the companies using long-term HRP. Their approach is leaning more towards a mixture of career planning and soft HRP. However. We can see a trend indicating that the companies working after a more quantitative approach are the ones that have and/or are experiencing high employee turnover rates. the case study companies differ in the methods and approaches used to fulfil this objective. focusing more on creating a flexible workforce. as described in chapter 3. These companies mainly focus on internal factors in terms of HRP. This method of planning is similar to what in theory. in chapter 3. in the right places at the right time. one can argue that it is the speed of development itself that has caused the change in HRP. is referred to as contingency planning.7. the need for anticipating the demand and supply for 62 . As stated previously in the analysis the essence of HRP is to have the right people. they have the intentions of becoming more qualitative.7. While it can be argued that they are mainly quantitative in nature.e. SU) tend to focus on the supply and demand issues of competence. Logically. to end up with alternative forecasts of the future with the intention of making them more adjustable to changes.
Chapter 5 Analysis competence becomes greater in situations where the employee turnover rate is high. the general approach towards retaining employees involves working with the environment and providing development possibilities. According to theory presented in chapter 3. This change in attitude influences the HRP in the studied companies. HWR) the companies plan and act in more similar ways during times of economic recession. the general trend is to review the costs associated with. 63 . The majority of the case study companies. there is not the same need for issues such as supply and demand forecasts. In the light of this. the generation of people born in the 70s and 80s are more individualistic and less likely to remain with one employer. With the exception of a few (LME. Among the case study companies.3 Internal and External Influences on HRP A lot of the contemporary theory concerning HRP talks about increasingly dynamic environments with more discontinuities. The most apparent changes are that people are less likely to remain with one employer for life since they have higher demands on training. and more time can be dedicated to internal development. SAS and HWR. thus less time can be dedicated to internal issues.8. development and career possibilities. focusing on the hard aspects of HRM. for example having too large a workforce than required. except LME. i. the majority of the case study companies’ HRP concerning lower level employees is affected. if so. The main issue to consider in terms of HRP is that more emphasis has to be put on retaining key employees. feel that there have been some changes in employee attitudes. In times of economic fluctuations. Whereas. During economic growth the differences in their HRP philosophy become more apparent. 5. in less turbulent environments in terms of employee turnover. to what extent and in what ways they have been affected by this turbulence. this would mean that the respective HR departments are less restricted in their work during economical growth. creating a turbulent arena in which HRP must flourish. one of our intentions was to investigate if this is the percieved reality among the case study companies and. Arguably.e. During economic recessions.
which in turn implies that these companies have the greatest need to control the external supply of competence. those companies working most actively with universities (ABV. as well as the increasing mobility of the population. SU. a majority of the case study companies (LME. but for which the company can see a future demand. LME. A few companies 64 . HWR. The implications for numbers. MCD. we believe that this way of working will become increasingly important. organisational. SU) also have relatively high employee turnover. As securing the availability of the right competence is a fundamental part in the work of having the right people. MHC. Thus. location and design of jobs and employment contracts are therefore more significant than is currently realised by many HR managers. Working with factors that increase the companies’ attractiveness as an employer. thus making the planning for internal supply more difficult. Worth mentioning. in the right places at the right time. skills. There is a wide variety of opinions among the companies studied concerning the effects that technological development has had on HRP. Since people are more prone to leave their current employer. something that is becoming more and more common. ABV) are working closely with the universities in an attempt to influence students to educate themselves in areas that the companies can see a current as well as a future demand for. with the right skills.8 says that the speed of recent change has been such that the applications of computerised technology in products and processes are now driving and facilitating much of the market. is a way of trying to reduce the amount of unexpected leaves. such as the ones mentioned above. The theory in chapter 3. and communication changes that are taking place. this change in employee behaviour has also influenced the way in which a majority of the studied companies work with the external supply of competence. companies can not be as certain today that there is a constant supply of the right competence as they could before. However.Chapter 5 Analysis One unknown aspect of internal supply is the fact that people choose to leave. For example in situations where students are reluctant to enrol on programmes leading to professions for which there is low demand at the moment.
and lack of basic computer knowledge. Among the studied companies with product development departments the problem rather lies in finding the right competence in narrow sectors and. as mentioned in theory.Chapter 5 Analysis (MCD. like the sales department. the competence that in many cases is the most relevant for now and the future. in times of less demand there is also less need 65 . MHC. keeping the rest of the organisation updated with what is happening in terms of new product developments. such as redundancies caused by rationalisation. The companies that feel that they are affected by legislation say that it becomes more apparent in times of downsizing. by legislation when it comes to HRP. It is hard to see any trends in how new technology affects the HRP among the case study companies since their spontaneous reactions are quite different.e. They do however see a problem with finding competence that handles both new and old technology as well as how to keep other parts of the workforce. a few of the companies do not see a problem with the employees that are at the cutting edge of new technology. updated with new technology so that it can be effectively explained and communicated to customers. However. HWR. Another problem is the inflexibility of work regulations. for example USA. One dilemma mentioned is that when downsizing the work force. SKF) said that they were not influenced at all. is no longer an issue among the studied companies but one mentions that the previous large group of administrators is now almost completely gone. you lose a lot of the competence that you hired last. i. since employment protection is quite rigid in Sweden compared to. Even though the development of legislation has not been turbulent and rapid we wanted to see how laws affected Swedish companies in the way they plan for recruitment and redundancies. the traditional problem areas with IT. LME) can see the benefits with new technology in terms of HRP. such as improved planning tools and improved possibilities for a more flexible workforce by having employees working at a distance. or not to a great extent. The implication of numbers. We were quite surprised to find that half of the case study companies (ABV. as mentioned. such as technicians and engineers. In terms of skills required. are no longer important issues.
Furthermore. thus something that has always been a part of the planning and is therefore not seen as problem. where hiring one person could be a huge investment and you really need to be certain that you have a demand for this new resource. When comparing the external and internal factors that influence HRP. Not surprisingly. the companies studied are all quite large companies. since the effects of laws are more apparent in terms of downsizing. There might be different reasons why so many of the case study companies feel that laws in terms of HRP do not influence them. the complexity of the organisational structure is seen as a very important factor when considering HRP. however. SKF) are not as affected by employment laws. management culture. One reason could be that the employment legislation in Sweden is something that the companies are used to. The effect of laws is arguably more apparent in small companies. influence the way in which the case study companies plan. SKF) companies it is because they have little demand for new competence and that they operate in stable environments. LME). growth and development policies etc.Chapter 5 Analysis for fulltime employees but you can not control this in a great extent since employees have contracts with the company. thus policies on growth and organisational structure becomes increasingly important concerning how HRP is conducted. While external factors. We wanted to find out how and to what extent factors like organisational size and structure. For a few of these (HWR. However. This is. a majority of the companies studied come to the conclusion that internal factors play a more significant role. Another reason could be that companies with low turnover in employees (HWR. it is also important to consider the internal factors and how they affect HRP. do have various impacts on the HRP in companies. even for companies that operate in turbulent environments (ABV. not the whole 66 . the companies in stable industries and/or with low employee turnover pay more attention to internal factors. such as the one mentioned above. One company (MHC) argues that it is the level of involvement of the HR department in the overall strategic process that is the most important factor for conducting HRP successfully.
These arguments are in line with the theory in chapter 3. such as if the structure of the company is inadequate for training. thus more emphasis should be put on recruiting the right attitude. are issues that can be influenced. These companies (ABV. This fact does not mean that they affect HRP more. and this is something that you cannot avoid as long as people are involved. We argue that even though the external factors. the issue of subjectivity needs even more consideration.8. SAS. some more than others. but HR managers might consider them more important. that changing attitudes is very difficult. 67 . MHC. 5. We argue that if companies are to focus more on generic skills the likelihood of subjectivity in the recruitment process will increase.Chapter 5 Analysis truth. thus it will make more sense to recruit the right “attitude” and provide the knowledge gradually. The companies argue however. and to what extent the HR department is involved in the development of business strategy. rather than vice versa. SKF) argue that knowledge becomes obsolete quicker today and this is something that will become even more apparent in the future. All of the companies studied stated that there is always a certain level of subjectivity in the recruitment process. where changing employee attitudes is considered to become more important. LME. influence the way of planning in the case study companies these are factors that you rarely can exert any influence over. as becoming increasingly important. Internal factors on the other hand. If the case is that more emphasis will be put on desired generic skills in the recruitment process. since companies in highly volatile industries also consider factors such as organisational structure and cooperation between different departments as more important for successful HRP than external factors. development and flexibility of the work force. and among those who answered a majority saw generic skills. such as social competence and the ability to easily adjust to change.4 Future Aspects of HRP We asked the case study companies if they could make a prediction of what competencies they think will be most relevant in the future. since the personality of candidates is a subjective judgement.
i. In the light of this. the turbulence in many industries force companies to focus on other issues.herself. the future role of the HR department is to provide an attractive environment in which employees feel inspired and have the possibility to develop their competencies. We argue that even though the scenario presented in the theory is a desired one. As we have mentioned before. During our research we have only come across one company (SKF) that plans in accordance with the above theory. companies with a high employee turnover operating in volatile industries needs to handle issues such as redundancies and the supply and demand of competence.2. we argue that working with the issues mentioned in the theory will be difficult for companies outside a safe and stable environment reserved for a few. SKF is a company in a very stable industry with low employee turnover. 68 .Chapter 5 Analysis According to the theory in chapter 3. as well as promoting individual competence planning. puts a lot of effort in creating an environment for personal growth. but with the individual him. it is claimed that the responsibility for individual competence development may not be with the company.e. Furthermore.
where finding the right people. In times of organisational growth or downsizing organisations naturally focus on hiring or retaining the right people with the right skills. During our research we have found evidence supporting the above statement. to find answers to our main problem. with the right skills. Among the companies with an explicit internal focus there is a lack of attention for external 69 . Logically counting heads becomes more important in times of growth or downsizing. By presenting and discussing findings concerning our two research problems. we hope. we can see a risk with not having a balanced view in terms of external and internal HRP. However. Consequently organisations experiencing more stable periods can focus on softer HRP.Chapter 6 Conclusions 6. concentrating more on making sure that the existing workforce is utilised in the optimal way. at the right time. at the right time. This could be illustrated by breaking down the motive. consequently. with the right skills is the essential condition for having them at the right place. Our impression during the research is that all companies have the intention to focus more on internal HRP.e. where organisations with a high employee turnover tend to focus on the planning for supply and demand of HR. and it is rather a natural selection based on the individual prerequisites. Regardless of the organisational size and industry the underlying motive behind HRP is to have the right people. Conclusions In this section we aim at highlighting the main findings observed throughout our research. However. while organisations with low employee turnover lean more towards internal issues of HRP. the ways to realise this motive do differ from one organisation to another depending on the individual prerequisites. organisations with a modest employee turnover can focus more on having the people in the right place i. in the right places. i. concentrating on the creation of an environment that stimulates personal development and motivation among the employees. thus the nature of the HRP shifts towards a quantitative approach. However.e. thus companies do not decide to be either quantitative or qualitative in their approach.
the greater the need for planning the more difficult it becomes to plan. But at the same time others are experiencing relative stability. there has been turbulence in the business environment such as technological developments and erratic economic fluctuations. The common understanding among the companies is that it is impossible to follow a plan rigorously but they still plan. if any relevance among the organisations. Today organisations do not plan more than three years ahead and the plans are revised both annually and quarterly. it is rather the planning process itself that adds value to the organisation. organisations are very much 70 . Historically. thus we can see an inherent risk of becoming “fat and happy” which in turn requires reactive actions in times of major change. some theorists question planning since it is virtually impossible to foresee changes with any accuracy. determining their approach to plan. the fact is that environments vary across industries. however it is not these factors per se that has caused the change today. While there are different prerequisites between organisations. This is made evident by the fact that companies no longer plan in the same way as they did ten to fifteen years ago when the more static conditions allowed the organisations to plan with more accuracy. However. but rather the speeds in which discontinuities occur. In the light of this. Some organisations occasionally experience disruption. By incorporating plans made across the whole range of personnel and development activity the organisation becomes more alert to changes and prepares itself for future discontinuities regardless of their nature. this view appears to have little. Thus. However. we can also see a general change affecting the ability for all organisations to plan. Organisations that embrace this way of thinking plan to a greater extent than in the past in the way that it involves a broader definition of HRP. This development has put the organisations in a dilemma. where planning is viewed as a less formal process.Chapter 6 Conclusions developments and trends. organisations and over time. thus admitting that change will occur is more important than foreseeing the future. incorporating not only quantitative measures but also soft issues. From this we draw the conclusion that planning is more than just forecasting the future.
firstly we can see a general change among all companies in the way they plan for HR.Chapter 6 Conclusions influenced by their individual prerequisites limiting their abilities to plan to the extent as described above. secondly HRP is still very much based on individual prerequisites. Two findings concerning HRP seems to distinguish themselves. 71 .
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what is your opinion on this? 8.Chapter 8 Appendix 8. What is your definition of HRP? a. what do you do to avoid this issue? 6. if yes. Is there a linkage between the HR strategy and the Business strategy? a. How do you scan it? b. Appendix Interview Questions 1. if yes. Do you consider subjectivity in the recruitment and planning process to be a problem. What is the purpose of your HRP and what are the expected outcomes? 3. if yes? a. Who collects the information? c. Do you scan your business environment. How often do you scan the environment? 83 . How many years ahead do you plan? 2. Are there any negative aspects with planning? According to some theory you loose flexibility when you plan too rigorously. How often do you review your plan(s)? 10. Is there a difference in the way you conduct HRP today compared to before. Who in the organisation has influence over the recruitment and planning process? 5. Is it possible to measure the outcome of HRP? 9. What kind of HRP does your organization conduct? b. How closely do HR people work with business strategists? 7. in what way is it different? 4.
if yes? a. Do fluctuations in the business cycle affect the planning? a. In what way? b. Do international and political occurrences affect the HRP? 16. Does laws. Has technological developments had any influence on the way you conduct HRP? 18. that influence the way you conduct HRP? 19. Do internal factors influence HRP. if yes? a. What are these factors? b. Are there other external factors. Is it possible to say whether external or internal has more influence on HRP than the other? 21.Chapter 8 Appendix 11. Are you considering external supply and demand of competencies in the HRP? 15. Has the attitude among the workforce changed. What kind of employees and what competence do you consider to be desirable in ten years form today? 22. policies and international regulations influence the way you plan? 12. Do you have anything to add to what we have discussed? 84 . Does it affect HRP? 17. Does the HR department receive more or less attention depending on the economic climate? 13. beside the above. In what way do they affect the HRP? 20. Do you plan for potential downsizing in a long term perspective? 14.
This action might not be possible to undo. Are you sure you want to continue?